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Berkshire Hathaway, the American multinational conglomerate holding company, reported that its recently entered into whole account quota share reinsurance agreement with Tokio Marine boosted premium volumes in the second-quarter, which otherwise would have fallen primarily due to lower property underwriting volumes.
Berkshire Hathaway reported that overall re/insurance underwriting earnings fell in the second-quarter compared to the prior year, but this was driven by a decline at auto specialist GEICO which reported higher loss ratio reflecting claims frequencies and average severities as well as higher commissions and marketing expenses.
Net underwriting earnings across the Berkshire Hathaway GEICO, primary and reinsurance arms fell to $1.731 billion in Q2 2026, down from $1.992 billion in the prior year period.
But the reinsurance businesses fared much better, with overall pre-tax underwriting earnings rising to $913 million for the quarter, a meaningful improvement on $650 million from Q2 2025.
Property and casualty reinsurance delivered $1.138 billion of underwriting earnings for Q2 2026, beating the prior year’s $1.045 billion.
Helping the P&C reinsurance result for Berkshire Hathaway was the fact the company has experienced no significant catastrophe losses, benchmarked as $150 million or greater, in the first six months of 2026, when $760 million of losses from the California wildfires were reported in H1 2025.
In addition, Berkshire’s P&C reinsurance business benefitted from a $609 million reduction in losses and loss adjustment expenses from prior year events in the last quarter, another meaningful contributor to this segments earnings beat in Q2 2026.
While Berkshire Hathaway has reported declining premium volumes in property business across both its primary insurance and reinsurance businesses, likely due to the softening of pricing we assume, its P&C reinsurance arm was boosted by the recent agreement and whole account deal with Tokio Marine.
Recall that, back in the first-quarter of this year, Berkshire Hathaway’s reinsurance arm National Indemnity Company (NICO) acquired a 2.5% stake in the Japanese insurer, in a deal that comprised the following three key elements: strategic equity investment in Tokio Marine Holdings, Inc., collaboration in reinsurance, and strategic collaboration in M&A and global investment opportunities.
The reinsurance component involves Berskshire’s NICO business taking assuming a portion of Tokio Marine’s portfolio through a ten-year whole account quota share reinsurance agreement.
That agreement is now in-force and was another factor in boosting Berkshire’s P&C reinsurance results.
In the second-quarter and first six months of 2026 Berkshire Hathaway recorded $483 million of non-life premiums through this whole account reinsurance arrangement with insurance subsidiaries of Tokio Marine.
Absent this agreement with Tokio Marine, Berkshire Hathaway stated, “Otherwise, premiums written in the second quarter and first six months of 2026 declined 5.6% and 3.8%, respectively, relative to 2025, primarily due to lower property volumes.”
Which clearly demonstrates the value of this large-scale arrangement with Tokio Marine, which has locked in a source of premiums over a long-term for Berkshire Hathaway.
The low level of major catastrophe losses and positive prior year reserve development are also significant factors for the Berkshire Hathaway P&C reinsurance businesses in the last quarter and without these factors its underwriting earnings might have been much lower.
But, the quota share reinsurance arrangement with Tokio Marine helped to boost premiums in the period, with $5.226 billion written in Q2 2026, compared to $5.022 billion in Q2 2025, despite the pull-back on property reinsurance underwriting in the softened marketplace.
Large single deals of this scale provide meaningful optionality for Berkshire Hathaway’s reinsurance business, which likely enables some flexibility for its subsidiaries in a time when portions of the underwriting market may not meet their hurdles any more. It enables the company’s P&C reinsurance business to employ disciplined cycle management while still growing its premiums, which in the current market environment is an attractive option to have.
The post Berkshire Hathaway P&C reinsurance boosted by Tokio Marine deal, as property volumes fall appeared first on ReinsuranceNe.ws.
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