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To: TobagoJack who wrote (17396)	3/26/2002 8:21:15 PM
From: Frank Pembleton	Respond to of 74559

Jay... your comment on insurance coverage is reflected by Warren Buffet in Q3: To the Shareholders of Berkshire Hathaway: Normally I write you just once a year. However, results of the third quarter, as summarized above, are anything but normal and I would like to elaborate a bit on what took place. We initially reported an estimate of $2.2 billion for our pre-tax insurance loss from the terrorist attack of September 11th. We labeled that amount a "guess" and the earnings reported above include a charge of $2.275 billion from the attack. This revised number remains a guess: Important questions of liability will likely remain unresolved for years. Consequently, neither we nor other industry participants can be reasonably precise now as to final losses. We estimate that about $1.7 billion of our loss occurred at General Re and $.575 billion at Berkshire Hathaway's Reinsurance Group. A mega-catastrophe is no surprise: One will occur from time to time, and this will not be our last. We did not, however, price for manmade mega-cats, and we were foolish in not doing so. In effect, we, and the rest of the industry, included coverage for terrorist acts in policies covering other risks ¾ and received no additional premium for doing so. That was a huge mistake and one that I myself allowed. berkshirehathaway.com