Berkshire’s collection of insurers posted their first underwriting loss this year, driven by losses at its namesake groups of primary insurers and reinsurers. The businesses were hit by costs tied to the pandemic as well as losses from Hurricanes Laura and Sally in recent months.

Geico, the company’s auto insurer, reported a nearly 27% drop in pretax underwriting earnings, partially driven by a program to give consumers premium credits because of the pandemic.

Virus Impact
Covid-19 continued to put pressure on Berkshire’s operations. For its insurers, it meant not just claims tied to the pandemic, but also customers failing to pay premiums and higher operating costs with staff scattered. Operations such as the railroad were also hit by ripple effects from the virus and shutdowns.

Still, Berkshire said several of its manufacturing, service and retailing businesses saw significant increases in profit in the third quarter from the previous three months, when they “declined considerably.”

Berkshire’s operations, such as aerospace-parts maker Precision Castparts, have had to furlough or cut workers this year as the virus gripped the nation. Buffett’s company warned in its third-quarter report that some businesses might have to continue to restructure.

“Certain of our businesses are undertaking and will likely continue to undertake restructuring activities that will resize their operations to better fit expected customer demand,” Berkshire said Saturday in the filing.

Cash
Despite Berkshire’s record buybacks and stock investments, the conglomerate’s cash pile was just slightly lower than the second quarter’s record. Berkshire held roughly $145.7 billion in cash at the end of the third quarter, down less than $1 billion from the end of June.

Berkshire’s recently been expanding its hunting horizons, with its $6 billion bet on Japanese trading houses and even a stake in the newly public Snowflake Inc.

“Berkshire just has so much capital, they have to take other bets they’ve never made before and kind of be adventurous,” said Cole Smead, who is president and portfolio manager at Smead Capital Management. “The question is whether they will actually earn negative returns in some of these.”

Energy Gains
Berkshire’s sprawling energy empire was a bright spot in the third quarter. That business posted $1.4 billion of earnings in the period, its highest level in more than a decade as revenue climbed 8.8% from a year earlier.