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To: Amy J who wrote (171297)	9/27/2002 9:29:40 AM
From: Road Walker	Read Replies (3) \| Respond to of 186894

Amy, OT- Insurance Two weeks ago our home owners insurance was canceled, effective November 30th. The company explained that they were lowering their risk exposure to hurricanes. Working through an agent (our agent said he didn't represent any companies that would write a new policy in our county), we finally found a company that would write a policy for only one year, and they were only writing 1000 policies in our county. The new agent said that homeowners insurance for coastal counties in Florida may end up being a government program, that every insurance company is lowering their risk profile. Lowering of risk is not limited to insurance, the banks won't make the same loans they would a year ago, investors won't buy the same stocks with "potential", that they would a year ago, PE's are lower, corporate bonds require a higher premium, risk free treasuries pay very low rates. These things feed on each other. As banks, insurance companies and investors become more risk adverse, there is less potential for growth, which increases risk. Leading to more risk aversion. I think 9/11 provided a psychological backdrop for avoiding risk, and intensified a typical end of business cycle risk aversion. The threat of war certainly isn't helping. Deficit spending and the subsequent decline in the dollar adds to the problem. How do you turn the cycle? Ya got me. John

To: Amy J who wrote (171297)	9/27/2002 8:13:02 PM
From: Jacques Newey	Read Replies (1) \| Respond to of 186894

Amy, Re:" the insurance industry must be in bad shape these days" No, that's not necessarily the case. " Berkshire Hathaway profits leap on insurance rates OMAHA, Neb., Aug 9 (Reuters) - Berkshire Hathaway Inc. (NYSE:BRKa - News), the holding company run by billionaire investor Warren Buffett, reported a 35 percent rise in quarterly profits Friday, as its insurance operations made gains on rising premium rates. Berkshire, whose insurance and reinsurance businesses provide money for Buffett to invest, reported a net second- quarter profit of $1.0 billion, or $681 a share. That compared with $773 million, or $506 a share, the year before. Excluding $13 million in realized gains from selling investments, Berkshire posted an operating profit of $1.0 billion, or $673 a share. That compared with $353 million, or $231 a share, the previous year. On that basis, Wall Street expected $550 a share, on average, according to analysts polled by research firm Thomson First Call. The rise in profit comes as insurance and reinsurance rates continue to soar, after a decade of declines. Price increases were only accelerated by a surge in demand for insurance and a tightening of supply after Sept. 11. Berkshire's Class A stock, which has not been split in Buffett's 37 years in charge, closed at $71,000 a share Friday on the New York Stock Exchange. The stock has fallen 6 percent so far this year, outperforming the Standard & Poor's 500 index, which has fallen 21 percent. from Yahoo Re:"The insurance industry is sharing their pain with the high-tech industry." Take a look at a stock chart comparing the performance of Berkshire Hathaway (primarily an insurance company) versus INTC, MSFT, CSCO, SUNW over the past 2 years. You might be surprised.