The bear market for stocks hasn’t even spared Warren Buffett’s Berkshire Hathaway, as the stock has dropped almost 20 percent since December.
That’s almost a third more than the 15 percent decline in the S&P 500 stock index during the same period. It also constitutes the worst first-half of a year for the company since 1990, Bloomberg News points out.
Buffett warned shareholders in February that profits in the company’s key insurance business would slide, after Berkshire reported record net income last year of $13.2 billion.
“That party is over,” Buffett wrote in his annual letter to shareholders. “It is a certainty that insurance industry profit margins, including ours, will fall significantly in 2008.”
Three of Berkshire Hathaway’s 10 biggest stock holdings as of March 31 have tumbled recently. Wells Fargo, Berkshire’s second-biggest position, plummeted 18 percent in the second quarter, while American Express and U.S. Bancorp dropped 14 percent.
Berkshire has suffered from the decline in commercial property insurance rates from their lofty levels after Hurricane Katrina in 2005.
Property and casualty rates in the U.S. fell 14 percent in the first quarter of this year from the same period in 2007, according to a survey by the Council of Insurance Agents and Brokers.
Berkshire, which owns National Indemnity, General Re Corp. and Geico Corp., endured a 70 percent plunge in earnings from insurance underwriting in the first quarter, to $181 million. | 
