The invasion of Ukraine by Russia and threats of a possible nuclear warfare between a number of nations was was a subject of debate on the annual Berkshire Hathaway Inc (NYSE: BRK-A)(NYSE: BRK-B) shareholder assembly. Right here’s what Warren Buffett needed to say in regards to the dangers of nuclear warfare and what it might imply for insurance coverage firms.
What Occurred: Buffett advised Berkshire Hathaway shareholders that the danger of nuclear warfare is actual and a significant concern. Buffett additionally mentioned it was lucky that in World Struggle II, the U.S. invented the atomic bomb earlier than different nations.
“It’s a really, very, very, very harmful world,” Buffett mentioned, citing the massive stockpiles of nuclear weapons that nations have.
A query from the viewers prompted a debate on what function a nuclear catastrophe might have on insurance coverage firms, a sector that Berkshire Hathaway has heavy publicity to.
Buffett mentioned there may be little that Berkshire Hathaway can do when it comes to threat of nuclear warfare. Buffett additionally mentioned that nuclear warfare would affect different insurance coverage industries and make it extra expensive for Berkshire to underwrite insurance policy.
“For sure issues, we don’t write insurance policies on as a result of we wouldn’t be capable to make good on them anyway,” Buffett mentioned.
Berkshire Hathaway Vice Chairman Ajit Jain, who heads the insurance coverage sector, supplied his tackle the potential on an incident involving nuclear weapons.
“It’s very troublesome for us to estimate how unhealthy it may be,” Jain mentioned.
Jain mentioned he was “pretty optimistic” that insurance coverage firms could possibly be on the road to pay out damages from nuclear warfare by regulators and the courts.
In contrast to earthquakes and hurricanes, that are dangers that may be estimated by insurance coverage firms, Jain mentioned the price of nuclear occasions is difficult to foretell and to estimate how unhealthy it could possibly be.
Associated Hyperlink: Berkshire Hathaway Annual Shareholder Assembly Again In Individual After Two Yr Break
Why It’s Essential: Together with discussing the dangers of nuclear warfare, Jain additionally mentioned the truth that Geico has fallen behind rival Progressive Corp (NYSE: PGR) within the automotive insurance coverage sector.
“Each have their pluses and minuses, however having mentioned that, there’s no query that just lately Progressive has accomplished a significantly better job than Geico,” Jain mentioned.
Jain credited Progressive with being early on telematics, which entails placing a tool in a automobile that tracks driving patterns after which providing decrease charges for safer driving habits.
“It is going to take some time, however my hope is that within the subsequent 12 months or two, Geico shall be positioned to meet up with Progressive,” he added.
Photograph: Courtesy of Fortune Stay Media on Flickr
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