Written (%) Dividends Losses (%) GNP Deflator (%)
----------- ------------------ ------------- --------------
1981 ..... 3.8 106.0 6.5 9.6
1982 ..... 3.7 109.6 8.4 6.5
1983 ..... 5.0 112.0 6.8 3.8
1984 ..... 8.5 118.0 16.9 3.8
1985 ..... 22.1 116.3 16.1 3.0
1986 ..... 22.2 108.0 13.5 2.6
1987 ..... 9.4 104.6 7.8 3.1
1988 ..... 4.4 105.4 5.5 3.3
1989 (Revised) 3.2 109.2 7.7 4.1
1990(Est.) 4.5 109.8 5.0 4.1
Source: A.M. Best Co.
The combined ratio represents total insurance costs (losses
incurred plus expenses) compared to revenue from premiums: A ratio
below 100 indicates an underwriting profit, and one above 100
indicates a loss. The higher the ratio, the worse the year. When the
investment income that an insurer earns from holding policyholders'
funds ("the float") is taken into account, a combined ratio in the 107 -
111 range typically produces an overall breakeven result, exclusive of
earnings on the funds provided by shareholders.
综合比率代表保险的总成本(理赔损失加上费用)占保费收入的比例，比率在100
以下代表有承保的损失，在100以上则代表有承保的获利综合比率代表的是保
险的总成本(损失加上费用)占保费收入的比率，100以下代表会有承销利益，100
以上代表会有承销损失，若把持有保费收入浮存金(扣除股东权益部份所产生的
盈余)所产生的投资收益列入考量，损益两平的范围大概是在107-111之间。
For the reasons laid out in previous reports, we expect the
industry's incurred losses to grow at an average of 10% annually, even
in periods when general inflation runs considerably lower. (Over the
last 25 years, incurred losses have in reality grown at a still faster rate,
11%.) If premium growth meanwhile materially lags that 10% rate,
underwriting losses will mount, though the industry's tendency to
under-reserve when business turns bad may obscure their size for a
time.
基于前几次年报所说明的理由，即使是通货膨胀在这几年来相对温和，我们预期
保险业每年损失增加的比率约在10%左右，若是保费收入成长没有到达10%以
上，损失一定会增加，(事实上过去25年以来，理赔损失系以11%的速度在成
长)，虽然保险公司在景气不好时，会习惯性地将损失暂时隐藏起来。
Last year premium growth fell far short of the required 10% and
underwriting results therefore worsened. (In our table, however, the
severity of the deterioration in 1990 is masked because the industry's
1989 losses from Hurricane Hugo caused the ratio for that year to be
somewhat above trendline.) The combined ratio will again increase in
1991, probably by about two points.
去年保费收入的成长远低于最基本的10%要求，承保成绩可想而知会继续恶化，
(不过在这张表上，1990年恶化的程度因为1989年发生Hugo飓风钜额损失
而被略微掩盖)，1991年的综合比率将会再度恶化，有可能会增加2个百分点
以上。
Results will improve only when most insurance managements
become so fearful that they run from business, even though it can be
done at much higher prices than now exist. At some point these
managements will indeed get the message: The most important thing
to do when you find yourself in a hole is to stop digging. But so far
that point hasn't gotten across: Insurance managers continue to dig -
sullenly but vigorously.
虽然以现在的市场状况保险业者大可以用比现在更高的价格来作生意，但营运结
果却只可能在所有的保险公司主管因为恐惧而远离市场时才有可能好转，就某种
程度而言，这些经理人应该已经收到了一些讯息，当你发现自己深陷洞中最重要
的一件事就是不要再挖了，不过这个临界点显然还没到，许多保险公司虽然不甘
愿但还是用力地在挖洞。
The picture would change quickly if a major physical or financial
catastrophe were to occur. Absent such a shock, one to two years will
likely pass before underwriting losses become large enough to raise
management fear to a level that would spur major price increases.
When that moment arrives, Berkshire will be ready - both financially
and psychologically - to write huge amounts of business.
还好这种情况可能在发生重大的天然灾害或金融风暴后很快地改变，但若是没有
这类事件发生，可能还要再等一、两年，直到所有的保险公司受不了钜额的承保
损失，才有可能迫使经理人大幅提高保费，而等那个时刻到来时，Berkshire一
定会作好准备，不论是在财务上或是心理上，等着接下大笔大笔的保单。
In the meantime, our insurance volume continues to be small but
satisfactory. In the next section of this report we will give you a
framework for evaluating insurance results. From that discussion, you
will gain an understanding of why I am so enthusiastic about the
performance of our insurance manager, Mike Goldberg, and his cadre
of stars, Rod Eldred, Dinos Iordanou, Ajit Jain, and Don Wurster.
在此同时，我们的保费收入虽然很少但还是处于可以接受的范围，在下一段报告
中我会告诉大家如何去衡量保险公司的绩效表现，看完之后你就会明了，为何我
对我们的保险事业经理人，包含Mike Goldberg与他的明星团队Rod Eldred、
Dinos Lordanou、Ajit Jalin与Don Wurster的表现会感到如此满意了。
In assessing our insurance results over the next few years, you
should be aware of one type of business we are pursuing that could
cause them to be unusually volatile. If this line of business expands, as
it may, our underwriting experience will deviate from the trendline you
might expect: In most years we will somewhat exceed expectations
and in an occasional year we will fall far below them.
在衡量我们保险事业过去几年的经营绩效时，大家必须特别注意因为我们所追求
的生意形态而造成经营结果的波动，若是这类型的生意扩张，事实上这很有可
能，则我们的承保结果可能会与一般产业趋势有很大的差异，大部分的时候，我
们的成绩会超乎大家的预期，但很有可能在某一年度又大幅落后在产业标准之
下。
The volatility I predict reflects the fact that we have become a
large seller of insurance against truly major catastrophes
("super-cats"), which could for example be hurricanes, windstorms or
earthquakes. The buyers of these policies are reinsurance companies
that themselves are in the business of writing catastrophe coverage for
primary insurers and that wish to "lay off," or rid themselves, of part of
their exposure to catastrophes of special severity. Because the need
for these buyers to collect on such a policy will only arise at times of
extreme stress - perhaps even chaos - in the insurance business, they
seek financially strong sellers. And here we have a major competitive
advantage: In the industry, our strength is unmatched.
我预估的波动主要是反应在我们即将成为真正超大型意外灾害保单(又称霹雳猫)
承保人的事实之上，这些灾害有可能是飓风、风暴或是地震，这类保单的购买者
大多是接受一般保险业者分散风险的再保公司，由于他们自己本身也要分散或是
卸下部份单一重要灾害的风险，而由于这些保险公司主要是希望在发生若干重大
的意外后，在一片混乱之中还能有可以依靠的对象，所以在选择投保对象时，首
重的就是财务实力，而这正是我们最主要的竞争优势，在这个业界，我们坚强的
实力是别人所比不上的。
A typical super-cat contract is complicated. But in a plain- vanilla
instance we might write a one-year, $10 million policy providing that
the buyer, a reinsurer, would be paid that sum only if a catastrophe
caused two results: (1) specific losses for the reinsurer above a
threshold amount; and (2) aggregate losses for the insurance industry
of, say, more than $5 billion. Under virtually all circumstances, loss
levels that satisfy the second condition will also have caused the first
to be met.
典型的霹雳猫合约相当的复杂，不过以一个最简单的例子来说，我们可能签下一
年期，1,000万美元的保单，其中规定再保公司在灾害造成两种状况下才有可能
得到理赔，(1)再保公司的损失超过一定的门槛(2)整个保险业界的总损失超过一
定的门槛，假设是50亿美元，只是通常在第二种条件符合时，第一个条件也会
达到标准。
For this $10 million policy, we might receive a premium of, say, $3
million. Say, also, that we take in annual premiums of $100 million
from super-cat policies of all kinds. In that case we are very likely in
any given year to report either a profit of close to $100 million or a
loss of well over $200 million. Note that we are not spreading risk as
insurers typically do; we are concentrating it. Therefore, our yearly
combined ratio on this business will almost never fall in the industry
range of 100 - 120, but will instead be close to either zero or 300%.
对于这种1,000万的保单，我们收取的保费可能会在300万左右，假设我们一
年收到所有的霹雳猫保费收入为1亿美元，则有可能某些年度我们可以认列将
近1亿美元的利益，但也有可能在单一年度要认列2亿美元的损失，值得注意
的是我们不像其它保险公司是在分散风险，相反地我们是将风险集中，因此在这
一部份，我们的综合比率不像一般业者会介于100-120之间，而是有可能会介
于0-300之间。
Most insurers are financially unable to tolerate such swings. And if
they have the ability to do so, they often lack the desire. They may
back away, for example, because they write gobs of primary property
insurance that would deliver them dismal results at the very time they
would be experiencing major losses on super- cat reinsurance. In
addition, most corporate managements believe that their shareholders
dislike volatility in results.
当然有许多业者无法承受这样大幅的变动，而且就算有能力可以做到，他们的意
愿也不会太高，他们很可能在吃下一大笔保单之后，因为灾害发生一时必须承担
大额的损失而被吓跑，此外大部分的企业管理阶层会认为他们背后的股东应该不
喜欢变动太大。
We can take a different tack: Our business in primary property
insurance is small and we believe that Berkshire shareholders, if
properly informed, can handle unusual volatility in profits so long as
the swings carry with them the prospect of superior long-term results.
(Charlie and I always have preferred a lumpy 15% return to a smooth
12%.)
不过我们采取的方向就不同了，我们在初级产险市场的业务相当少，但我们相信
Berkshire的股东，若事先经过沟通，应该可以接受这种获利波动较大，只要最
后长期的结果能够令人满意就可以的经营结果，(查理跟我总是喜欢变动的15%
更胜于固定的12%)。
We want to emphasize three points: (1) While we expect our
super-cat business to produce satisfactory results over, say, a decade,
we're sure it will produce absolutely terrible results in at least an
occasional year; (2) Our expectations can be based on little more than
subjective judgments - for this kind of insurance, historical loss data
are of very limited value to us as we decide what rates to charge today;
and (3) Though we expect to write significant quantities of super-cat
business, we will do so only at prices we believe to be commensurate
with risk. If competitors become optimistic, our volume will fall. This
insurance has, in fact, tended in recent years to be woefully
underpriced; most sellers have left the field on stretchers.
我们有三点必须要强调(1)我们预期霹雳猫的业务长期来讲，假设以10年为期，
应该可以获得令人满意的结果，当然我们也知道在这其中的某些年度成绩可能会
很惨(2)我们这样的预期并非是基于客观的判断，对于这样的保险业务，历史的
资料对于我们在做订价决策时并没有太大的参考价值(3)虽然我们准备签下大量
的霹雳猫保单，但有一个很重要的前提那就是价格必须要能够与所承担的风险相
当，所以若我们的竞争对手变得乐观积极，那么我们的量就会马上减少，事实上
过去几年市场价格有点低的离谱，这使得大部分的参与者都被用担架抬离场。
At the moment, we believe Berkshire to be the largest U.S. writer
of super-cat business. So when a major quake occurs in an urban area
or a winter storm rages across Europe, light a candle for us.
在此同时，我们相信Berkshire将会成为全美最大的霹雳猫承保公司，所以要是
那天都会地区发生大地震或是发生席卷欧陆地区的风暴时，请点亮蜡烛为我们祈
祷。
Measuring Insurance Performance
衡量保险业的表现
In the previous section I mentioned "float," the funds of others
that insurers, in the conduct of their business, temporarily hold.
Because these funds are available to be invested, the typical
property-casualty insurer can absorb losses and expenses that exceed
premiums by 7% to 11% and still be able to break even on its business.
Again, this calculation excludes the earnings the insurer realizes on
net worth - that is, on the funds provided by shareholders.
在前段文章我曾提到浮存金-也就是保险业者在从事业务时，所暂时持有的资
金，因为这些资金可以用在投资之上，所以产物意外险公司即使在损失与费用超
过保费收入7%到11%，仍能自行吸收达到损益两平，当然这要扣除保险业者本
身的净值，也就是股东自有资金所产生的获利，。
However, many exceptions to this 7% to 11% range exist. For
example, insurance covering losses to crops from hail damage
produces virtually no float at all. Premiums on this kind of business
are paid to the insurer just prior to the time hailstorms are a threat,
and if a farmer sustains a loss he will be paid almost immediately.
Thus, a combined ratio of 100 for crop hail insurance produces no
profit for the insurer.
当然7%到11%的范围还是有许多例外情况，例如保险业者承保谷物冰雹伤害损
失几乎没有浮存金的贡献，保险业者通常是在冰雹即将来临之前才收到保费收
入，而只要其中有任何一位农夫发生损失就要马上支付赔偿金，因此即使谷物冰
雹保险的综合比率为100，保险业者也赚不了半毛钱。
At the other extreme, malpractice insurance covering the potential
liabilities of doctors, lawyers and accountants produces a very high
amount of float compared to annual premium volume. The float
materializes because claims are often brought long after the alleged
wrongdoing takes place and because their payment may be still further
delayed by lengthy litigation. The industry calls malpractice and
certain other kinds of liability insurance "long- tail" business, in
recognition of the extended period during which insurers get to hold
large sums that in the end will go to claimants and their lawyers (and
to the insurer's lawyers as well).
另外一个极端的例子，执行业务过失保险-一种专门提供给医师、律师与会计师
分散可能责任风险的保险，较之每年收到的保费收入，这部份险种的浮存金就很
高，这种浮存金之所以很重要的原因在于理赔申请案通常会在业务过失发生很长
一段时间之后才会提出，而且真正理赔的时点也会因冗长的法律诉讼程序结束后
才会执行，保险业界统称业务过失保险与其它特定种类的责任保险为"长尾巴业
务"意思是说保险业者在将理赔金支付给申请人跟他的律师(或甚至是保险公司
的律师)之前，可以持有这一大笔的资金相当长的一段时间。
In long-tail situations a combined ratio of 115 (or even more) can
prove profitable, since earnings produced by the float will exceed the
15% by which claims and expenses overrun premiums. The catch,
though, is that "long-tail" means exactly that: Liability business written
in a given year and presumed at first to have produced a combined
ratio of 115 may eventually smack the insurer with 200, 300 or worse
when the years have rolled by and all claims have finally been settled.
像这种长尾巴业务，通常即使综合比率高达115(或更高)都还可能有获利，因为
在索赔与费用发生之前的那一段时间利用浮存金所赚的利润甚至会超过15%，
但重点是所谓的长尾巴顾名思义，就是在某一年度承接的责任保险保单之时，假
设会有115的综合比率，但结果到最后尾大不掉，经过多年的纠缠，终于和解
的结果，有可能让保险业者承担200、300或是更糟的综合比率。
The pitfalls of this business mandate an operating principle that
too often is ignored: Though certain long-tail lines may prove
profitable at combined ratios of 110 or 115, insurers will invariably
find it unprofitable to price using those ratios as targets. Instead,
prices must provide a healthy margin of safety against the societal
trends that are forever springing expensive surprises on the insurance
industry. Setting a target of 100 can itself result in heavy losses;
aiming for 110 - 115 is business suicide.
这项业务一定要特别注意一项时常令人忽略的经营原则的陷阱，虽然部份长尾巴
业务在110到115的综合比率之间仍可以获利，但若是保险业者依此比率来订
定保费价格的话很可能会亏大钱，所以保费价格必须要有一个安全的边际空间以
防止当今总是会让保险业有昂贵的意外蹦出来的社会趋势，将综合比率设在100
一定会产生重大的损失，将目标锁定在110-115之间则无异是自杀的行为。
All of that said, what should the measure of an insurer's
profitability be? Analysts and managers customarily look to the
combined ratio - and it's true that this yardstick usually is a good
indicator of where a company ranks in profitability. We believe a better
measure, however, to be a comparison of underwriting loss to float
developed.
说了那么多，到底该如何衡量一家保险公司的获利能力呢? 分析师与经理人通常
习惯性的会去看综合比率，当然在我们要看一家保险公司是否赚钱时，这项比率
是一个很好的正确指针，但我们认为还有一项数字是更好的衡量标准，那就是承
保损失与浮存金的比率。
This loss/float ratio, like any statistic used in evaluating insurance
results, is meaningless over short time periods: Quarterly underwriting
figures and even annual ones are too heavily based on estimates to be
much good. But when the ratio takes in a period of years, it gives a
