Berkshire's results from its bread-and-butter insurance lines will deteriorate in 2007, though Buffett said he thought they would remain satisfactory.

The claim has two parts: (a) 2007 results from the core insurance lines (GEICO, General Re, Berkshire Hathaway Primary Group and the non-catastrophe reinsurance business) were worse than in 2006, and (b) they stayed satisfactory, meaning they still made an underwriting profit. Use the underwriting results in Berkshire's 2007 annual report. True: the combined underwriting profit of those lines (or of Berkshire's insurance operations as a whole if the core lines cannot be separated) fell from 2006 to 2007 and was still positive. Mostly true: both parts hold, but one segment went against the trend in a way the overall picture does not depend on. Mixed: only one part holds (results improved but were satisfactory, or results deteriorated into an underwriting loss). False: results improved and were also unsatisfactory, or neither part holds in any other way.

Set before the research began.

1. E1 Berkshire Hathaway - 10-K annual report companiesmarketcap.com (reproducing Berkshire Hathaway's Form 10-K for 2007) · 29 February 2008 Own record

   “Year Ended December 31, 2007 2006 2005 Revenues:Insurance and Other:Insurance premiums earned$ 31,783 $ 23,964 $ 21,997”

2. E2 Berkshire Hathaway - 10-K annual report companiesmarketcap.com (reproducing Berkshire Hathaway's Form 10-K for 2007) · 29 February 2008 Own record

   “Insurance losses and loss adjustment expenses21,010 13,068 15,482 Life and health insurance benefits1,786 1,618 1,634 Insurance underwriting expenses5,613 5,440 4,828”

3. E3 2007Shareholder Letter Berkshire Hathaway Inc. (letter to shareholders, reproduced on berkshireletters.com) · 28 February 2008 Own record

   “Finally, our insurance business — the cornerstone of Berkshire — had an excellent year. Part of the reason is that we have the best collection of insurance managers in the business — more about them later. But we also were very lucky in 2007, the second year in a row free of major insured catastrophes.”

4. E4 New Nuggets From Warren Buffett U.S. News & World Report (Money) · 3 March 2008

   “Although Berkshire generated an impressive 20 percent gain in net income in 2007, fourth-quarter profits dropped 18 percent on weaker results in insurance and in businesses linked to housing.”

The 10-K income statement doesn't split out the core lines, so I used Berkshire's insurance operations as a whole, which the criteria allow. From the 10-K figures in E1 and E2, underwriting profit is premiums earned minus losses and loss adjustment expenses, life and health benefits, and underwriting expenses. That comes to about $3,374M for 2007 ($31,783M − $21,010M − $1,786M − $5,613M), down from about $3,838M for 2006 ($23,964M − $13,068M − $1,618M − $5,440M). So results got worse but still made an underwriting profit, and both parts of the claim hold. E3 (Buffett's 2007 letter) calls the insurance year excellent, and E4, an independent report, notes weaker insurance results in the fourth quarter. The whole-company figures also include catastrophe and retroactive business, so they are only a stand-in for the core lines.