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Revenues increased 9.4% year over year to $302 billion, attributable to higher insurance premiums earned and other investment income in Insurance and Other as well as higher operating revenues in Railroad, Utilities and Energy, Manufacturing, McLane, service and retailing.
In 2022, costs and expenses increased 9.3% year over year to $266.6 billion, largely driven by an increase in insurance losses and loss adjustment expenses, cost of sales and services, cost of leasing, selling, general and administrative expenses, freight rail transportation expenses, utilities and energy cost of sales and other expenses and interest expense.
Berkshire Hathaway’s Insurance and Other segment revenues increased 9.6% year over year to $249.9 billion in 2022 on the back of higher insurance premiums earned, sales and service revenues, leasing revenues, interest, dividend and other investment income.
Insurance underwriting generated an after-tax loss of $90 million in 2022 against the year-ago after-tax earnings of $728 million. After-tax losses from significant catastrophe events of nearly $2.4 billion in 2022, increases in private passenger automobile claims frequencies and severities at GEICO, weighed on the performance. It was partially offset by higher earnings from reinsurance underwriting and foreign currency exchange rate gains arising from the remeasurement of non-U.S. dollar-denominated liabilities of our U.S. insurance subsidiaries.
Railroad, Utilities and Energy operating revenues increased 8.1% year over year to $52.1 billion.
Pre-tax earnings of Railroad decreased 1.9% year over year to $7.7 billion due to lower volumes and higher fuel and other operating costs, offset by higher yield and fuel surcharge revenues.
After-tax earnings of the Utilities and Energy business increased 9.3% year over year in 2022. The increase in 2022 reflected higher earnings from other energy businesses, including tax equity investments and the Northern Powergrid businesses, as well as from the natural gas pipeline businesses. The increase was partly offset by lower earnings from the real estate brokerage business.
Total revenues at Manufacturing, Service and Retailing increased 9.3% year over year to $167.3 billion. Pre-tax earnings increased 11.5% year over year to $16.2 billion.
Financial Position
As of Dec 31, 2022, consolidated shareholders’ equity was $480.6 billion, down 6.7% from the level as of Dec 31, 2021. At quarter-end, cash and cash equivalents were $32.3 billion, down 62.2% from the level at the 2021 end.
As of Dec 31, 2022, insurance float was approximately $164 billion, 11.5% higher from the figure at year-end 2021. The increase in float includes $14 billion related to Berkshire’s acquisition of Alleghany Corporation.
Cash flow from operating activities totaled $37.2 billion in 2022, down 5.6% from the year-ago period. Berkshire Hathaway bought back shares worth $7.9 billion in 2022.
Kinsale Capital Group (KNSL - Free Report) delivered fourth-quarter 2022 net operating earnings of $2.60 per share, which outpaced the Zacks Consensus Estimate by 20.4%. The bottom line improved 49.4% year over year. Total revenues rose about 32.1% year over year to about $243 million. The growth can primarily be attributed to a rise in premiums and higher net investment income. The top line beat the Zacks Consensus Estimate by 3%.
Gross written premiums of $295.5 million rose 45% year over year, driven by strong submission flow from brokers and a favorable pricing environment. Net written premiums climbed 36.4% year over year to $242.1 million in the quarter. Net investment income more than doubled year over year to $17.7 million in the quarter. The upside came on the back of growth in the investment portfolio and higher interest rates.
NMI Holdings (NMIH - Free Report) reported a fourth-quarter 2022 operating net income per share of 86 cents, which was in line with Zacks Consensus Estimate. The bottom line increased 17.8% year over year. NMI Holdings’ total operating revenues of $133.1 million increased 6.4% year over year on higher net premiums earned (up 5%) and net investment income (up 32.8%). The top line missed the Zacks Consensus Estimate by 3.8%.
Primary insurance in force increased 20.8% to $184 billion. Annual persistency was 83.5%, up 1970 basis points year over year. New insurance written was $10.7 billion, down 42% year over year, reflecting a decline in refinancing origination volume year over year.
Palomar Holdings, Inc. (PLMR - Free Report) reported a fourth-quarter 2022 operating income of 82 cents per share, beating the Zacks Consensus Estimate by 5.13%. The bottom line increased 20.6% year over year. Total revenues improved 23.4% year over year to $87.8 million, mainly attributable to higher premiums and net investment income. The top line missed the Zacks Consensus Estimate by 3%.
Gross written premiums increased 60% year over year to $239.1 million. Net earned premiums increased 21.2% year over year to $82.2 million. Net investment income increased 81.6% year over year to $4.4 million, driven by higher returns on invested assets and a higher average balance of investments. Palomar witnessed an underwriting income of $20.1 million, 18.5% higher than the year-ago income of $17 million.
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Berkshire (BRK.B) Q4 Earnings Up Y/Y, Segment Results Solid
Berkshire Hathaway Inc. (BRK.B - Free Report) delivered fourth-quarter 2022 operating earnings of $6.7 billion, which decreased 7.9% year over year.
The increase was driven by higher earnings at Utilities and Energy, other controlled businesses and non-controlled businesses.
Berkshire Hathaway Inc. Price, Consensus and EPS Surprise
Berkshire Hathaway Inc. price-consensus-eps-surprise-chart | Berkshire Hathaway Inc. Quote
Full-Year Highlights
Revenues increased 9.4% year over year to $302 billion, attributable to higher insurance premiums earned and other investment income in Insurance and Other as well as higher operating revenues in Railroad, Utilities and Energy, Manufacturing, McLane, service and retailing.
In 2022, costs and expenses increased 9.3% year over year to $266.6 billion, largely driven by an increase in insurance losses and loss adjustment expenses, cost of sales and services, cost of leasing, selling, general and administrative expenses, freight rail transportation expenses, utilities and energy cost of sales and other expenses and interest expense.
Berkshire Hathaway’s Insurance and Other segment revenues increased 9.6% year over year to $249.9 billion in 2022 on the back of higher insurance premiums earned, sales and service revenues, leasing revenues, interest, dividend and other investment income.
Insurance underwriting generated an after-tax loss of $90 million in 2022 against the year-ago after-tax earnings of $728 million. After-tax losses from significant catastrophe events of nearly $2.4 billion in 2022, increases in private passenger automobile claims frequencies and severities at GEICO, weighed on the performance. It was partially offset by higher earnings from reinsurance underwriting and foreign currency exchange rate gains arising from the remeasurement of non-U.S. dollar-denominated liabilities of our U.S. insurance subsidiaries.
Railroad, Utilities and Energy operating revenues increased 8.1% year over year to $52.1 billion.
Pre-tax earnings of Railroad decreased 1.9% year over year to $7.7 billion due to lower volumes and higher fuel and other operating costs, offset by higher yield and fuel surcharge revenues.
After-tax earnings of the Utilities and Energy business increased 9.3% year over year in 2022. The increase in 2022 reflected higher earnings from other energy businesses, including tax equity investments and the Northern Powergrid businesses, as well as from the natural gas pipeline businesses. The increase was partly offset by lower earnings from the real estate brokerage business.
Total revenues at Manufacturing, Service and Retailing increased 9.3% year over year to $167.3 billion. Pre-tax earnings increased 11.5% year over year to $16.2 billion.
Financial Position
As of Dec 31, 2022, consolidated shareholders’ equity was $480.6 billion, down 6.7% from the level as of Dec 31, 2021. At quarter-end, cash and cash equivalents were $32.3 billion, down 62.2% from the level at the 2021 end.
As of Dec 31, 2022, insurance float was approximately $164 billion, 11.5% higher from the figure at year-end 2021. The increase in float includes $14 billion related to Berkshire’s acquisition of Alleghany Corporation.
Cash flow from operating activities totaled $37.2 billion in 2022, down 5.6% from the year-ago period. Berkshire Hathaway bought back shares worth $7.9 billion in 2022.
Zacks Rank
Berkshire currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other P&C Insurers
Kinsale Capital Group (KNSL - Free Report) delivered fourth-quarter 2022 net operating earnings of $2.60 per share, which outpaced the Zacks Consensus Estimate by 20.4%. The bottom line improved 49.4% year over year. Total revenues rose about 32.1% year over year to about $243 million. The growth can primarily be attributed to a rise in premiums and higher net investment income. The top line beat the Zacks Consensus Estimate by 3%.
Gross written premiums of $295.5 million rose 45% year over year, driven by strong submission flow from brokers and a favorable pricing environment. Net written premiums climbed 36.4% year over year to $242.1 million in the quarter. Net investment income more than doubled year over year to $17.7 million in the quarter. The upside came on the back of growth in the investment portfolio and higher interest rates.
NMI Holdings (NMIH - Free Report) reported a fourth-quarter 2022 operating net income per share of 86 cents, which was in line with Zacks Consensus Estimate. The bottom line increased 17.8% year over year. NMI Holdings’ total operating revenues of $133.1 million increased 6.4% year over year on higher net premiums earned (up 5%) and net investment income (up 32.8%). The top line missed the Zacks Consensus Estimate by 3.8%.
Primary insurance in force increased 20.8% to $184 billion. Annual persistency was 83.5%, up 1970 basis points year over year. New insurance written was $10.7 billion, down 42% year over year, reflecting a decline in refinancing origination volume year over year.
Palomar Holdings, Inc. (PLMR - Free Report) reported a fourth-quarter 2022 operating income of 82 cents per share, beating the Zacks Consensus Estimate by 5.13%. The bottom line increased 20.6% year over year. Total revenues improved 23.4% year over year to $87.8 million, mainly attributable to higher premiums and net investment income. The top line missed the Zacks Consensus Estimate by 3%.
Gross written premiums increased 60% year over year to $239.1 million. Net earned premiums increased 21.2% year over year to $82.2 million. Net investment income increased 81.6% year over year to $4.4 million, driven by higher returns on invested assets and a higher average balance of investments. Palomar witnessed an underwriting income of $20.1 million, 18.5% higher than the year-ago income of $17 million.