Berkshire Hathaway, the investment group run by Warren Buffett, is pushing up the price of hurricane insurance as a precaution against the possible impact of climate change. Mr Buffett said it remained an open question whether “atmospheric, oceanic or other causal factors have dramatically changed the frequency or intensity of hurricanes” but after the worst quarterly losses in industry history it was prudent to limit exposure. Berkshire’s insurance subsidiaries lost $3.4bn from the 2005 US hurricane season – a significant drag on otherwise-healthy annual results published on Saturday. “Our ignorance means we must follow the course prescribed by Pascal in his famous wager about the existence of God,” Mr Buffett wrote to shareholders. “Since he didn’t know the answer, his personal gain/loss ratio dictated an affirmative conclusion.” Berkshire is one of the world’s largest providers of cover against very large catastrophes, partly by reinsuring companies offering home and property insurance. “We’ve concluded that we should now write mega-cat policies only at prices far higher than prevailed last year – and then only with an aggregate exposure that would not cause us distress if shifts in some important variable produce far more costly storms in the […]

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