The decline exceeds the drop of the Standard & Poor’s 500 Index and marks the worst first half for the Omaha, Nebraska- based investment and holding company since 1990. Price competition has driven down revenue at Berkshire’s insurance units, which account for about half of its income…
But at least Buffett predicted this would happen, which once again sets the Oracle of Omaha apart from every other CEO in America.
After reporting record 2007 earnings of $13.2 billion, the 77-year-old Buffett told shareholders in February that profit margins from insurance will drop.
“That party is over,” Buffett wrote in his annual letter to shareholders in February. “It is a certainty that insurance industry profit margins, including ours, will fall significantly in 2008.”
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