1990 ........................... 4.5 109.6
1991 (Revised) ................. 2.4 108.8
1992 (Est.) .................... 2.7 114.8
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 106 - 110 range typically produces an
overall break-even 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106-110之间。
About four points in the industry's 1992 combined ratio can
be attributed to Hurricane Andrew, which caused the largest
insured loss in history. Andrew destroyed a few small insurers.
Beyond that, it awakened some larger companies to the fact that
their reinsurance protection against catastrophes was far from
adequate. (It's only when the tide goes out that you learn who's
been swimming naked.) One major insurer escaped insolvency
solely because it had a wealthy parent that could promptly supply
a massive transfusion of capital.
1992年的综合比率由于史上最大的单一损失理赔事件-Andrew 飓风发生而多
增加了4个百分点，Andrew让几家小型保险公司因此倒闭，另外他也让许多大
型保险公司发觉自己并未寻求到足够的再保险保护，(只有当浪退了，大家才知
道是谁没穿衣服还在游泳的)，还有一家大型的保险公司要不是因为背后有个有
钱的母公司及时供应资金的话，可能早就已经关门大吉了。
Bad as it was, however, Andrew could easily have been far
more damaging if it had hit Florida 20 or 30 miles north of where
it actually did and had hit Louisiana further east than was the
case. All in all, many companies will rethink their reinsurance
programs in light of the Andrew experience.
坏归坏，还好Andrew没有往北20-30英哩侵袭到佛罗里达，或是往东侵袭到
路易西安那州，否则损失可能难以估计，总而言之，很多公司因为Andrew事
件可能会重新考虑现有的再保险安排是否适当。
As you know we are a large writer - perhaps the largest in
the world - of "super-cat" coverages, which are the policies that
other insurance companies buy to protect themselves against major
catastrophic losses. Consequently, we too took our lumps from
Andrew, suffering losses from it of about $125 million, an amount
roughly equal to our 1992 super-cat premium income. Our other
super-cat losses, though, were negligible. This line of business
therefore produced an overall loss of only $2 million for the
year. (In addition, our investee, GEICO, suffered a net loss
from Andrew, after reinsurance recoveries and tax savings, of
about $50 million, of which our share is roughly $25 million.
This loss did not affect our operating earnings, but did reduce
our look-through earnings.)
大家知道Berkshire一直都是霹雳猫保单相当大的发行公司，或许规模已是全世
界最大的，这类保单通常是由其它保险公司买来分散他们本身在重大意外事故所
需承担的风险，也因此我们必须承受一大块Andrew所造成的损失，金额约为
1.25亿美元，这数字相当于我们一整年的保费收入，不过还好其它霹雳猫保单
实际发生的损失都相当轻微，所以结算下来全年的总损失只有200万美元，(另
外我们的被投资公司GEICO也因Andrew飓风产生了一些损失，在扣除再保分
摊与税负抵减之后，金额约为5,000万美元，依我们的持股比例大概要分摊
2,500万美元，虽然这项损失不会反应在我们的帐上，但确实已对我们的透视盈
余造成影响)。
In last year's report I told you that I hoped that our
super-cat business would over time achieve a 10% profit margin.
But I also warned you that in any given year the line was likely
to be "either enormously profitable or enormously unprofitable."
Instead, both 1991 and 1992 have come in close to a break-even
level. Nonetheless, I see these results as aberrations and stick
with my prediction of huge annual swings in profitability from
this business.
在去年的年报中，我曾告诉各位我们希望能从霹雳猫保险这类业务获得10%的
利润空间，但我还是要提醒各位在某些特定的年度中，有可能一下子大赚或是一
下子大亏，然而1991年与1992年倒是维持在损益两平的边缘，不过我还是认
为这样的结果有点异常，同时我还是坚持在这行获利可能大好大坏的预测。
Let me remind you of some characteristics of our super-cat
policies. Generally, they are activated only when two things
happen. First, the direct insurer or reinsurer we protect must
suffer losses of a given amount - that's the policyholder's
"retention" - from a catastrophe; and second, industry-wide
insured losses from the catastrophe must exceed some minimum
level, which usually is $3 billion or more. In most cases, the
policies we issue cover only a specific geographical area, such
as a portion of the U.S., the entire U.S., or everywhere other
than the U.S. Also, many policies are not activated by the first
super-cat that meets the policy terms, but instead cover only a
"second-event" or even a third- or fourth-event. Finally, some
policies are triggered only by a catastrophe of a specific type,
such as an earthquake. Our exposures are large: We have one
policy that calls for us to pay $100 million to the policyholder
if a specified catastrophe occurs. (Now you know why I suffer
eyestrain: from watching The Weather Channel.)
我还是苦口婆心再提醒各位霹雳猫保单的特点，通常只有在两种情况发生时，理
赔才会生效，首先受我们保护的保险或再保公司的损失必须超过一定金额-也就
是保户的自留保额部份；第二整个保险业界的损失也必须超过一定的上限，比如
说30亿美元以上或甚至更多。在大部分的状况之下，我们发行的保单只包含特
定地区，像是美国一部份州、或是全美国或是除了美国的以外地区，另外有许多
保单也不是在第一次大型灾害发生后就须理赔，有的只保第二次或第三次甚至是
第四次大灾害，最后一点有些保单只保特定种类的灾害，比如说是地震，我们暴
露的风险相当的大，我们有一张保单若是发生保单上指定的特定灾害发生的话，
就必须给予保户1亿美元的理赔，(现在你应该知道我常常盯着气象频道盯到眼
睛酸的原因了吧)。
Currently, Berkshire is second in the U.S. property-casualty
industry in net worth (the leader being State Farm, which neither
buys nor sells reinsurance). Therefore, we have the capacity to
assume risk on a scale that interests virtually no other company.
We have the appetite as well: As Berkshire's net worth and
earnings grow, our willingness to write business increases also.
But let me add that means good business. The saying, "a fool
and his money are soon invited everywhere," applies in spades in
reinsurance, and we actually reject more than 98% of the business
we are offered. Our ability to choose between good and bad
proposals reflects a management strength that matches our
financial strength: Ajit Jain, who runs our reinsurance
operation, is simply the best in this business. In combination,
these strengths guarantee that we will stay a major factor in the
super-cat business so long as prices are appropriate.
现在Berkshire是全美国净值第二大的产业意外险公司(排名第一的是州农保
险，不过他们并不从事再保业务)，因此我们绝对有能力也有兴趣去承担别的保
险公司无法承担的风险，随着Berkshire的净值与获利能力继续成长，我们接受
保单的意愿也跟着增加，但是我必须强调只有好的生意我们才愿意接，有人说：
笨的有钱人特别好骗，我想这句话也适用在再保险之上，事实上我们平均我们拒
绝98%以上上门的保单请求，我们挑选客户的能力跟我们本身的财务实力相当，
Ajit Jain负责经营我们的再保业务，堪称业界的翘楚，两者结合使得我们的竞争
力确保我们可以在霹雳猫保险业界继续成为主要的参与者，只要保费价格合理的
话。
What constitutes an appropriate price, of course, is
difficult to determine. Catastrophe insurers can't simply
extrapolate past experience. If there is truly "global warming,"
for example, the odds would shift, since tiny changes in
atmospheric conditions can produce momentous changes in weather
patterns. Furthermore, in recent years there has been a
mushrooming of population and insured values in U.S. coastal
areas that are particularly vulnerable to hurricanes, the number
one creator of super-cats. A hurricane that caused x dollars of
damage 20 years ago could easily cost 10x now.
当然何谓合理的价格实在是很难去界定，灾害保险业者实在是很难依据过去的经
验来预估未来，例如若是全球温室效应确实存在的话，意外变量一定会增多，只
要大气状况有任何些微的转变就有可能造成气象形态的巨幅波动，更有甚者，最
近几年美国海岸地区人口爆炸性成长，使得这些地区的被保标的特别容易受到飓
风的侵袭，而飓风正是超级意外最常发生的第一名，现在一次飓风所发生的损失
可能是二十年前的十倍以上。
Occasionally, also, the unthinkable happens. Who would have
guessed, for example, that a major earthquake could occur in
Charleston, S.C.? (It struck in 1886, registered an estimated 6.6
on the Richter scale, and caused 60 deaths.) And who could have
imagined that our country's most serious quake would occur at New
Madrid, Missouri, which suffered an estimated 8.7 shocker in
1812. By comparison, the 1989 San Francisco quake was a 7.1 -
and remember that each one-point Richter increase represents a
ten-fold increase in strength. Someday, a U.S. earthquake
occurring far from California will cause enormous losses for
insurers.
而且有时还会有意想不到的事情发生，比如说谁会想到Charleston地区竟然会
发生大地震(它在1886年发生，芮氏规模6.6，造成60个人死亡)，又有谁知
道美国史上最严重的地震是1812年发生在密苏里州估计规模8.7的那次地震，
比较起来1989年发生在旧金山的大地震，规模只有7.1，大家要知道每增加
0.1级代表其释放的力量就要增加10倍，哪一天要是加州发生大地震的话，将
会对所有保险业者造成难以估计的损失。
When viewing our quarterly figures, you should understand
that our accounting for super-cat premiums differs from our
accounting for other insurance premiums. Rather than recording
our super-cat premiums on a pro-rata basis over the life of a
given policy, we defer recognition of revenue until a loss occurs
or until the policy expires. We take this conservative approach
because the likelihood of super-cats causing us losses is
particularly great toward the end of the year. It is then that
weather tends to kick up: Of the ten largest insured losses in
U.S. history, nine occurred in the last half of the year. In
addition, policies that are not triggered by a first event are
unlikely, by their very terms, to cause us losses until late in
the year.
当各位在检视我们每季的数字时，大家一定要知道我们霹雳猫保险的会计原则与
一般保险有些许的不同，没有将霹雳猫的保费收入按保单发行期间平均分摊认
列，我们必须等到整个保单期间结束或是损失发生后才全部一次认列，我们之所
以采取这样保守的做法，原因在于霹雳猫保单在年度截止之前特别容易发生意
情，尤其是天气状况更是如此，在历史上前十大意外灾害中，有九件是发生在下
半年，此外由于许多保单在第一次重大灾害发生时，并不理赔，所以若真的发生
损失的话，通常会是在下半年。
The bottom-line effect of our accounting procedure for
super-cats is this: Large losses may be reported in any quarter
of the year, but significant profits will only be reported in the
fourth quarter.
对于霹雳猫保险我们的会计原则底限就是，钜额的损失可能会发生在任何一季，
但钜额的获利只有在每年的第四季才有可能出现。
* * * * * * * * * * * *
As I've told you in each of the last few years, what counts
in our insurance business is "the cost of funds developed from
insurance," or in the vernacular, "the cost of float." Float -
which we generate in exceptional amounts - is the total of loss
reserves, loss adjustment expense reserves and unearned premium
reserves minus agents' balances, prepaid acquisition costs and
deferred charges applicable to assumed reinsurance. The cost of
float is measured by our underwriting loss.
就像是前几年向各位提过的，真正重要的是我们从保险业所取得的资金，其资金
成本到底是多少，套句专业术语，就是浮存金成本，浮存金-系指我们靠保险业
所取得大量的资金，系指将所有的损失准备、损失费用调整准备与未赚取保费加
总后，再扣除应付佣金、预付购并成本及相关再保递延费用，至于浮存金的成本
则是以我们所发生的承保损失来衡量。
The table below shows our cost of float since we entered the
business in 1967.
下表是我们在1967年进入保险业后，浮存金的成本统计：
(1) (2) Yearend Yield
Underwriting Approximate on Long-Term
Loss Average Float Cost of Funds Govt. Bonds
------------ ------------- ------------- -------------
(In $ Millions) (Ratio of 1 to 2)
1967 ......... profit $17.3 less than zero 5.50%
1968 ......... profit 19.9 less than zero 5.90%
1969 ......... profit 23.4 less than zero 6.79%
1970 ......... $ 0.37 32.4 1.14% 6.25%
1971 ......... profit 52.5 less than zero 5.81%
1972 ......... profit 69.5 less than zero 5.82%
1973 ......... profit 73.3 less than zero 7.27%
1974 ......... 7.36 79.1 9.30% 8.13%
1975 ......... 11.35 87.6 12.96% 8.03%
1976 ......... profit 102.6 less than zero 7.30%
1977 ......... profit 139.0 less than zero 7.97%
1978 ......... profit 190.4 less than zero 8.93%
1979 ......... profit 227.3 less than zero 10.08%
1980 ......... profit 237.0 less than zero 11.94%
1981 ......... profit 228.4 less than zero 13.61%
1982 ......... 21.56 220.6 9.77% 10.64%
1983 ......... 33.87 231.3 14.64% 11.84%
1984 ......... 48.06 253.2 18.98% 11.58%
1985 ......... 44.23 390.2 11.34% 9.34%
1986 ......... 55.84 797.5 7.00% 7.60%
1987 ......... 55.43 1,266.7 4.38% 8.95%
1988 ......... 11.08 1,497.7 0.74% 9.00%
1989 ......... 24.40 1,541.3 1.58% 7.97%
1990 ......... 26.65 1,637.3 1.63% 8.24%
1991 ......... 119.59 1,895.0 6.31% 7.40%
1992 ......... 108.96 2,290.4 4.76% 7.39%
Last year, our insurance operation again generated funds at a
cost below that incurred by the U.S. Government on its newly-issued
long-term bonds. This means that in 21 years out of the 26 years
we have been in the insurance business we have beaten the
Government's rate, and often we have done so by a wide margin.
(If, on average, we didn't beat the Government's rate, there would
be no economic reason for us to be in the business.)
去年我们保险营运所产生的资金成本还是一样低于美国政府当年所新发行的公
债利率，意思是说在过去26年的保险事业经营中，我们有21年是远胜于政府
公债发行利率，而且差距的幅度通常都相当可观，(那天要是我们平均的资金成
本高于政府公债的利率的话，我们实在就没有理由继续留在保险业了)。
In 1992, as in previous years, National Indemnity's commercial
auto and general liability business, led by Don Wurster, and our
homestate operation, led by Rod Eldred, made excellent
contributions to our low cost of float. Indeed, both of these
operations recorded an underwriting profit last year, thereby
generating float at a less-than-zero cost. The bulk of our float,
meanwhile, comes from large transactions developed by Ajit. His
efforts are likely to produce a further growth in float during
1993.
1992年，如同以往年度，由Don Wurster领导的国家产物意外险公司所经营
的汽车与一般责任保险以及Rod Eldred领导的Homestate营运，对于我们取
得低廉的资金有相当的贡献，事实上，在去年这两家公司都有承保获利，也就是
说所产生的保险浮存金的资金成本都是低于零，当然我们也有一大笔的浮存金是
来自于Ajit所开发出来的大型案件，展望1993年这方面所贡献的保费收入还
会增加。
Charlie and I continue to like the insurance business, which
we expect to be our main source of earnings for decades to come.
The industry is huge; in certain sectors we can compete world-wide;
and Berkshire possesses an important competitive advantage. We
will look for ways to expand our participation in the business,
either indirectly as we have done through GEICO or directly as we
did by acquiring Central States Indemnity.
查理跟我还是相当喜爱保险业，这也是我们预期未来十年盈余的主要来源，这个
产业规模够大，在某些类别我们可以与全世界业者竞争，同时Berkshire在这方
面也拥有特殊的竞争力，我们会继续寻找在这行增加参与的机会，不管是间接透
过GEICO、或是以取得中央州立保险公司的股权那样直接参与。
Common Stock Investments
股票投资
Below we list our common stock holdings having a value of over
$100 million. A small portion of these investments belongs to
subsidiaries of which Berkshire owns less than 100%.
