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To: BelowTheCrowd who wrote (171325)	9/29/2002 10:40:43 AM
From: Jacques Newey	Respond to of 186894

"BRK has a huge commercial insurance practice" If by commercial you mean hazard and re-insurance then I agree. "but not a lot of exposure to health and smaller exposure to consumer stuff" No exposure to health but wholly owned GEICO is a major auto insurer to consumers. GEICO (a major US auto insurer) is doing very well with prudent underwriting and current environment of rising auto premiums. "They also have a huge amount of other stuff in their portfolio" Yes, but insurance delivers roughly 50% of revenues and profits and is the main cash generating machine for BRK's other investments. Stand alone, Berkshire's insurance business is one of the largest in the world. The point I was trying to make, and still stand by, is that the insurance business is seeing some of the highest premium increases that they have seen in years. The insurance business is currently fantastic. Some insurance companies (stocks) are doing better than others because of foolish pricing by some (resulting in lower returns) and some poor investments by them using their float (funds they hold until they pay out claims). Many insurance companies, like individual investors, placed their bets on the high tech sector at the height of the boom. Now they are facing the music. Some companies have significantly less in their claim payout kitties than they originally took in as premiums. Fortunately, Berkshire Hathaway is not in that position. Buffet is sitting on $35 Billion in cash and bonds and waiting for the right deals to come along. With significant further market declines in the cards (according to him), more deals are on the way. Agreed that BH is not a "poster boy" for the insurance business in general. Berkshire Hathaway is a very rare bird.