Billionaire investor Warren Buffett, told shareholders in an annual letter on Friday to expect a downturn in 2008 for Berkshire Hathaway profit despite a strong 2007.
That party is over, he wrote. It is a certainty that insurance-industry profit margins, including ours, will fall significantly in 2008. Prices are down, and exposures inexorably rise.
He predicted that the insurance industry may even see additional losses.
If the winds roar or the earth trembles, results could be far worse, he added.
Meanwhile, Berkshire today reported an 18 percent drop in its fourth quarter net income amid lower investment gains and a fall in insurance underwriting fees. The company earned $715 million in the previous year.
Class A shares in of the company fell $250, or 0.18 percent, to close at $140,000. Class B shares rose $14.50, or 0.31 percent to $4,674.50