这场经典的赛事，甚至还用慢动作播放精彩的第四节，我们以今年封面的颜色表 .17
can usually detect large-scale errors in reserving, but the general public
can typically do no more than accept what's presented, and at times I
have been amazed by the numbers that big-name auditors have
implicitly blessed. As for Berkshire, Charlie and I attempt to be
conservative in presenting its underwriting results to you, because we
have found that virtually all surprises in insurance are unpleasant ones.
有一点必须特别注意的是，因为损失成本必须仰赖估算，所以保险业者对于承保
结算的成绩有相当大伸缩的空间，连带使得投资人很难正确地衡量一家保险公司
真正的浮存金成本，估计错误，通常是无心，但有时却是故意，与真实的结果往
往会有很大的差距，而这种结果直接反映在公司的损益表上，有经验的行家通常
可以经由公司的准备提列情形发现重大的错误，但对于一般投资大众来说，除了
被迫接受财务报表的数字之外，别无他法，而我个人常常被这些经过各大会计师
事务所背书的财务报告所吓到，至于就Berkshire本身而言，查理跟我在编列财
务报表时，都尽量采取最保守的做法，因为就我们个人的经验而言，保险业所发
生的意外，通常都不是什么好消息。
As the numbers in the following table show, Berkshire's insurance
business has been a huge winner. For the table, we have calculated our
float -- which we generate in large amounts relative to our premium
volume -- by adding net loss reserves, loss adjustment reserves, funds
held under reinsurance assumed and unearned premium reserves, and
then subtracting agents' balances, prepaid acquisition costs, prepaid
taxes and deferred charges applicable to assumed reinsurance. Our cost
of float is determined by our underwriting loss or profit. In those years
when we have had an underwriting profit, such as the last five, our cost
of float has been negative. In effect, we have been paid for holding
money.
不过如同下表中的数字所显示的，Berkshire的保险事业可说是大获全胜，表中
的浮存金，系将所有的损失准备、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，相对于我们的保费收入总额，
我们的浮存金部位算是相当大的，至于浮存金的成本则决定于所发生的承保损失
或利益而定，在某些年度，就像是最近五年，由于我们有承保利益，所以换句话
说，我们的资金成本甚至是负的，光是持有这些资金我们就已经开始让我们赚钱
了。
(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 zero10.08%
1980 profit 237.0 less than zero11.94%
1981 profit 228.4 less than zero13.61%
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%
1993 profit2,624.7 less than zero 6.35%
1994 profit3,056.6 less than zero 7.88%
1995 profit3,607.2 less than zero 5.95%
1996 profit6,702.0 less than zero 6.64%
1997 profit7,093.1 less than zero 5.92%
Since 1967, when we entered the insurance business, our float has
grown at an annual compounded rate of 21.7%. Better yet, it has cost us
nothing, and in fact has made us money. Therein lies an accounting
irony: Though our float is shown on our balance sheet as a liability, it
has had a value to Berkshire greater than an equal amount of net worth
would have had.
自从1967年我们进军保险业以来，我们的浮存金每年就以21.7%复合成长率
增加，更棒的是，这些资金完全不用成本，事实上它还能帮我们赚钱，可惜讽刺
的是，就会计原则而言，浮存金在会计报表系属于负债，但实际上，这些负债对
于Berkshire而言，其价值远高于列在帐上的其它股东权益。
The expiration of several large contracts will cause our float to
decline during the first quarter of 1998, but we expect it to grow
substantially over the long term. We also believe that our cost of float
will continue to be highly favorable.
虽然在1998第一季几项重大合约到期后，我们拥有的浮存金会略微减少，但就
长期而言，我们还是预期浮存金会大幅成长，同时我们也相信取得浮存金的成本
仍然会继续维持这种令人满意的态势。
Super-Cat Insurance
巨灾保险
Occasionally, however, the cost of our float will spike severely. That
will occur because of our heavy involvement in the super-cat business,
which by its nature is the most volatile of all insurance lines. In this
operation, we sell policies that insurance and reinsurance companies
purchase in order to limit their losses when mega-catastrophes strike.
Berkshire is the preferred market for sophisticated buyers: When the
"big one" hits, the financial strength of super-cat writers will be tested,
and Berkshire has no peer in this respect.
然而有时候我们浮存金的成本也会突然大幅上扬，主要的原因在于我们从事的巨
灾保险业务，本身属于保险业中变动最大的一种险种，从事这类业务，我们将保
单卖给其它保险公司与再保公司以分散其面临超大型意外灾害所可能承担的风
险，事实上，Berkshire是有经验的业者最喜爱往来的对象，因为他们深深知道
当有"大事"真正发生时，所有巨灾保险的承保业者都会面临财务实力的严峻挑
战，而Berkshire无疑的是同业之最。
Since truly major catastrophes are rare occurrences, our super-cat
business can be expected to show large profits in most years -- and to
record a huge loss occasionally. In other words, the attractiveness of our
super-cat business will take a great many years to measure. What you
must understand, however, is that a truly terrible year in the super-cat
business is not a possibility -- it's a certainty. The only question is when
it will come.
而由于真正重大的灾害并不是每年都发生，所以我们的巨灾业务极有可能在连续
几年赚大钱后，突然又发生重大的损失，换句话说，我们这项巨灾保险业务到底
有多吸引人可能要花上好几年才有办法看得清，不过大家必须明了，所谓的重大
损失的年头不是可能会发生，而是肯定会发生，唯一的问题是它什么时候会降
临。
Last year, we were very lucky in our super-cat operation. The world
suffered no catastrophes that caused huge amounts of insured damage,
so virtually all premiums that we received dropped to the bottom line.
This pleasant result has a dark side, however. Many investors who are
"innocents" -- meaning that they rely on representations of salespeople
rather than on underwriting knowledge of their own -- have come into
the reinsurance business by means of purchasing pieces of paper that
are called "catastrophe bonds." The second word in this term, though, is
an Orwellian misnomer: A true bond obliges the issuer to pay; these
bonds, in effect, are contracts that lay a provisional promise to pay on
the purchaser.
去年我们在巨灾业务的表现还算不错，全世界一整年到头都没有发生足以造成重
大损失的大型灾害，也就是说基本上一整年收到的所有保费都自动落到我们的口
袋里，只是事情并不如想象中完美，有许多不知情的投资人，并非基于本身对于
保险承保的认识而是在业务人员的怂恿推销之下，进场买进一种叫做"巨灾债券"
的有价证券，事实上这根本就是一个错误的名词，真正的债券意指到期后发行人
有义务支付债款，然而这种债券，本质上其实是一种给予买方一种附条件承诺限
制的合约。
This convoluted arrangement came into being because the
promoters of the contracts wished to circumvent laws that prohibit the
writing of insurance by entities that haven't been licensed by the state. A
side benefit for the promoters is that calling the insurance contract a
"bond" may also cause unsophisticated buyers to assume that these
instruments involve far less risk than is actually the case.
这种拐弯抹角的做法主要是推销业者为了要规避政府禁止非保险业从事相关业
务而衍生出来的商品，而业者之所以将它取名叫做债券的原因在于这样的做法可
以吸引不知情的投资人，承担远比其表面上还高的许多的风险。
Truly outsized risks will exist in these contracts if they are not
properly priced. A pernicious aspect of catastrophe insurance, however,
makes it likely that mispricing, even of a severe variety, will not be
discovered for a very long time. Consider, for example, the odds of
throwing a 12 with a pair of dice -- 1 out of 36. Now assume that the
dice will be thrown once a year; that you, the "bond-buyer," agree to pay
$50 million if a 12 appears; and that for "insuring" this risk you take in
an annual "premium" of $1 million. That would mean you had
significantly underpriced the risk. Nevertheless, you could go along for
years thinking you were making money -- indeed, easy money. There is
actually a 75.4% probability that you would go for a decade without
paying out a dime. Eventually, however, you would go broke.
这些商品若未经过仔细的核算价格的话，很可能会形成极高的风险，更严重的是
灾害保险通常还有一种特色，那就是问题要经过许久之后才会慢慢地浮现，举个
例来说明，二颗骰子要掷出十二点的机率约为36分之一，现在假设我们一年只
掷一次，每次可以收取100万的赌注，但一旦掷出十二点时庄家的你必须支付
五千万美元，或许刚开始你会以为这100万美元得来全不费工夫，甚至有75.4%
的机率保证你在前十年都不必付出一毛钱，但最后你会发现就长期而言，接受这
样的赌注对庄家来说实际上是亏大了，甚至有可能让你倾家荡产。
In this dice example, the odds are easy to figure. Calculations
involving monster hurricanes and earthquakes are necessarily much
fuzzier, and the best we can do at Berkshire is to estimate a range of
probabilities for such events. The lack of precise data, coupled with the
rarity of such catastrophes, plays into the hands of promoters, who
typically employ an "expert" to advise the potential bond-buyer about
the probability of losses. The expert puts no money on the table.
Instead, he receives an up-front payment that is forever his no matter
how inaccurate his predictions. Surprise: When the stakes are high, an
expert can invariably be found who will affirm -- to return to our
example -- that the chance of rolling a 12 is not 1 in 36, but more like 1
in 100. (In fairness, we should add that the expert will probably believe
that his odds are correct, a fact that makes him less reprehensible --
but more dangerous.)
在玩这种骰子游戏时，其机率还很容易计算，但是要说到估算大型飓风与地震的
发生机率的难度就高的多了，我们自认能做的最多只有大约估计一个范围，然而
缺乏详细的信息，加上大型的灾害本来就很少发生，正好让一些有心人士有机可
乘，通常他们会雇用一些"专家"对有意投资这类债券的客户解说发生损失的可能
性，而这些所谓的专家玩得根本就是一种无本生意，因为不论他估算的到底准不
准，事先都可以拿到一笔订金，更令人讶异的是，回到前面的主题，你会发现无
论赌注有多高，专家永远会告诉你掷出12点的机率不是36分之一，而是100
分之一，(平心而论，我们必须强调这些专家可能真的认为自己的看法是对的，
这虽然让人不忍予以苛责但却更加凸显他们的危险性)。
The influx of "investor" money into catastrophe bonds -- which
may well live up to their name -- has caused super-cat prices to
deteriorate materially. Therefore, we will write less business in 1998. We
have some large multi-year contracts in force, however, that will
mitigate the drop. The largest of these are two policies that we
described in last year's report -- one covering hurricanes in Florida and
the other, signed with the California Earthquake Authority, covering
earthquakes in that state. Our "worst-case" loss remains about $600
million after-tax, the maximum we could lose under the CEA policy.
Though this loss potential may sound large, it is only about 1% of
Berkshire's market value. Indeed, if we could get appropriate prices, we
would be willing to significantly increase our "worst-case" exposure.
越来越多的资金涌入投资这类巨灾债券，使得巨灾的投保费率大幅下滑，其结果
可能真如其名，终将导致巨大的灾害，为此我们大幅减少1998年在这方面的业
务量，还好我们先前已签了好几件长期的合约使得冲击相对减小，其中最大的两
件在去年的年报中已向各位报告过，一件是佛罗里达的飓风险，另一个是与加州
地震局CEA签订的加州地震险，在最坏的状况下，我们必须承受的损失是税后
六亿美元，这也是CEA保单规定的上限，虽然这个数字看起来很大，但占
Berkshire市值的比例也不过只有1%，当然我必须再强调的是，只要保费合理，
我们很愿意大幅提高最坏状况的风险上限。
Our super-cat business was developed from scratch by Ajit Jain,
who has contributed to Berkshire's success in a variety of other ways as
well. Ajit possesses both the discipline to walk away from business that
is inadequately priced and the imagination to then find other
opportunities. Quite simply, he is one of Berkshire's major assets. Ajit
would have been a star in whatever career he chose; fortunately for us,
he enjoys insurance.
Berkshire的巨灾保险业务在Ajit Jain的努力下，从无到有，对Berkshire可谓
贡献良多，Ajit一方面有拒绝订价不合理保单的勇气，一方面又发挥创造力，开
创新的业务，他可以称得上是Berkshire最珍贵的资产之一，我觉得他不论从事
什么行业都可以成为那一行的明星，还好他对于保险业还算是相当有兴趣。
Insurance -- GEICO (1-800-555-2756) and Other Primary Operations
保险-盖可及其它主要保险事业
Last year I wrote about GEICO's Tony Nicely and his terrific
management skills. If I had known then what he had in store for us in
1997, I would have searched for still greater superlatives. Tony, now 54,
has been with GEICO for 36 years and last year was his best. As CEO, he
has transmitted vision, energy and enthusiasm to all members of the
GEICO family -- raising their sights from what has been achieved to
what can be achieved.
去年我提到盖可的Tony Nicely以及他优异的管理技能，不过我要是早知道他
在1997年的表现，我可能会试着去用更好的形容词，现年54岁的Tony在盖
可服务已有36年之久，在去年更达到个人事业的巅峰，身为公司的总裁，他的
识见、能量与热情感染到公司上上下下的每一个人，激励他们不断地超越巅峰。
We measure GEICO's performance by first, the net increase in its
voluntary auto policies (that is, not including policies assigned us by the
state) and, second, the profitability of "seasoned" auto business,
meaning policies that have been with us for more than a year and are
thus past the period in which acquisition costs cause them to be
money-losers. In 1996, in-force business grew 10%, and I told you how
pleased I was, since that rate was well above anything we had seen in
two decades. Then, in 1997, growth jumped to 16%.
我们运用好几种方法来衡量盖可的表现，首先是自愿加入汽车保单数量的净增加
数(也就是不包含州政府分配给我们的保单数)，第二长期汽车保单业务的获利状
况，系指那些持续一年以上，已经过了初次取得成本而开始赚钱的保单，1996
年有效保单的数量成长了10%，当时我曾告诉大家这是相当令人兴奋的一件事，
因为这是20年来的新高，不过到了1997年，保单数量的成长率又大幅跃升为
16%!
Below are the new business and in-force figures for the last five years:
下表是新加入自愿保单以及有效保单数量的统计:
New Voluntary Voluntary Auto
Years Auto Policies Policies in Force
1993354,882 2,011,055
1994396,217 2,147,549
1995461,608 2,310,037
1996617,669 2,543,699
1997913,176 2,949,439
Of course, any insurer can grow rapidly if it gets careless about
underwriting. GEICO's underwriting profit for the year, though, was
8.1% of premiums, far above its average. Indeed, that percentage was
higher than we wish it to be: Our goal is to pass on most of the benefits
of our low-cost operation to our customers, holding ourselves to about
4% in underwriting profit. With that in mind, we reduced our average
rates a bit during 1997 and may well cut them again this year. Our rate
changes varied, of course, depending on the policyholder and where he
lives; we strive to charge a rate that properly reflects the loss
expectancy of each driver.
当然任何一家保险公司都可以不顾承保品质而快速的成长，然而盖可本年度的承
保获利却是保费收入的8.1%，这数字远优于一般同业水准，确实这数字也远高
于我们本身的预期，我们原先的目标是将低成本营运所贡献的获利回馈给我们的
客户，仅保留4%的获利比例，基于这样的信念，我们将1997年的保险费率再
度略微调降，同时在明年有可能也会采取相同的做法，当然最后的费率还须参酌
保户本身状况以及居住的地区，我们最终还是希望费率的改变可以合理地反映每
位驾驶人发生损失的预期机率。
GEICO is not the only auto insurer obtaining favorable results these
days. Last year, the industry recorded profits that were far better than it
anticipated or can sustain. Intensified competition will soon squeeze
