Buffett: good day, not a loan-to-drag the insurance industry crisis

He's flagship investment company released the latest , insurance underwriting profit in the fourth quarter dropped by 46%

Buffett investment also failed to master the United States to avoid the loan-to-crisis. He's flagship investment company Berkshire Hathaway's latest release of , the company's fourth quarter of last year a profit of 2.95 billion U.S. dollars, up 18 percent year-on-year decline.

Despite the company's profits last year or an increase of 20 percent, reaching 13.21 billion U.S. dollars, but the public that "stocks of God," the master or the investment company expressed concern about the prospects.

"Not a good day. The insurance industry's profit margins in 2008, certainly there will be a significant drop." Buffett wrote in the letter, investors said, "Please for the next few years the insurance industry to prepare low-income."

Insurance profit fell 46 percent

All along, Hathaway half of the proceeds from the insurance industry. Hathaway February 29 statement, said the company's net income from a year ago to 3.58 billion U.S. dollars decreased 2.95 billion U.S. dollars, from the original 2,323 U.S. dollars per share fell to 1,904 U.S. dollars.

Excluded from the sale of shares in China Petroleum and the benefits and other one-time items earnings per share fell to 1,518 U.S. dollars, below the forecast of the outside world 1,613 U.S. dollars per share, the average forecast.

Since the sale of its auto insurance company GEICO profit fell 49 percent, and the reinsurance business declined, Hathaway insurance business in the fourth quarter underwriting profit fell 46 percent to 465 million U.S. dollars.

Based on this, Buffett is expected, the insurance industry profit margins may be reduced four percentage points. If have a hurricane or earthquake and other natural disasters, the results could be even worse.

The loan-to-crisis by the United States and California fires caused property damage and human casualties affected, KBW Insurance Index of 24 companies, 21 companies in the fourth quarter profits decline or incidental loss. Washington, the U.S. insurance agents and brokers to data released by the Association show that last year the fourth quarter of commercial insurance costs fell 12 percent. The world's fourth largest reinsurance broker Willis Group Holdings Limited (Willis Group Holdings Ltd) said that reinsurance prices in January fell by 15 percent.

Buffett's has 76 enterprises, although most can avoid fluctuations in financial markets last year, but some small part of poor performance, both basic and real estate-related. For example, bricks, carpets and real estate business are facing challenges.

The world's largest carpet manufacturer Shaw Industries profit fell 17 percent to 109 million U.S. dollars. Acme Brick and the Johns Manville company's revenues have been declining. The industry believe that the situation in the past, Buffett's company is rare.

The 77-year-old Buffett's annual letter to shareholders in talking about, some large financial institutions have experienced a serious problem. All Americans believe that house prices will always rise, this conviction makes the borrower's income and cash capital of the number of lending people seem not important, they believe that rising housing prices will cure all the problems. Because of this erroneous belief, the United States is experiencing a wide range of economic pains. When prices decline, the huge financial problems exposed.

"When the tide receded, you know who in the nude beach, we therefore see that in the past the big financial institutions in the ugly side." Buffett said.

Search for a new growth point

However, the current business situation, Buffett believes that the current economic environment for his company's impact is minor and temporary, his company in the industry's competitiveness remained strong.

"It is interesting that when the original Lu Shu is continuing to lose money in the time after, people have found a new way to lose money." Buffett cited Wells Fargo's CEO John Stumpf said.

Therefore, the general said, the Hathaway in 2007 is still good harvest year, the performance report shows the net assets of enterprises increased by 11 percent to 12.3 billion U.S. dollars; annual profits rose by 20 percent to 13.21 billion U.S. dollars .

At present, Buffett to actively seek foreign partners, because non-US business can help Berkshire dollar fell against the risk.

Federal Reserve Chairman Ben Bernanke hinted at further interest rate cuts may be in support of the U.S. economy after last week, the U.S. dollar against the euro fell to a record low.

Buffett to promote profit growth and foreign investment started countries, including China, Britain and Israel. Today, Buffett also is expanding the bond insurance business