Investment Maven Warren Buffett's Berkshire Hathaway Runs Up $2.69 Billion Loss in 3rd Quarter; Here's Why

Investment maven Warren Buffett's Berkshire Hathaway reported a net earnings loss of nearly $2.70 billion in the third quarter, as it was hit with setbacks in its investment portfolio.

Berkshire suffered a $962 million loss in insurance underwriting alone in the third quarter, marking its worst quarterly loss in a year. The biggest setback was in auto-insurer Geico, which reported a loss of $759 million.

Berkshire Hathaway

Auto Insurance Hit

"While customer demand for products and services was relatively good in 2022, demand began to weaken in the third quarter at certain of our businesses .... We continue to experience the negative effects of higher materials, freight, labor and other input costs," Berkshire said in a regulatory filing.

Buffett has been aggressive in insurance portfolios for decades but rising inflation and economic downturn have left a huge impact on the sector.

Auto insurance was particularly hit as insurers were dealt a blow by higher used-car prices and higher costs pertaining to medical claims as well as litigation.

warren buffett

"Geico is definitely a pressure point to watch at Berkshire ... It looks like Geico is losing market share as well," said Cathy Seifert, an analyst with CFRA Research, according to Forbes.

Berkshire Hathaway
Berkshire Hathaway has acquired stakes of about 5 percent in Itochu, Marubeni, Mitsubishi, Mitsui & Co and Sumitomo over the past 12 months YouTube Grab

Overall, Berkshire's operating earnings touched $7.76 billion, which is 20 percent more than that of last year. The rise was driven partly by an increase of $858 million in foreign-exchange gains due to the rise in the US dollar.