巴菲特給股東的信 1977年 Part 2

Insurance Underwriting

保險事業

Our insurance operation continued to grow significantly in 1977. It
was early in 1967 that we made our entry into this industry through the
purchase of National Indemnity Company and National Fire and Marine
Insurance Company (sister companies) for approximately $8.6 million. In
that year their premium volume amounted to $22 million. In 1977 our
aggregate insurance premium volume was $151 million. No additional
shares of Berkshire Hathaway stock have been issued to achieve any of this
growth.

我們的保險事業在1977年持續大幅地成長，早在1967年我們以860萬美元購併國
家產險及國家海上火險公司(兩者為姊妹公司)的方式進軍保險業，當年他們的保費收
入大約為2,200萬美元，時至今日，1977年的累積年保費收入已達1.51億美元，必
須強調的是，在此期間，Berkshire沒有再發行過任何一股新股以支應成長。

Rather, this almost 600% increase has been achieved through large
gains in National Indemnity’s traditional liability areas plus the starting of
new companies (Cornhusker Casualty Company in 1970, Lakeland Fire and
Casualty Company in 1971, Texas United Insurance Company in 1972, The
Insurance Company of Iowa in 1973, and Kansas Fire and Casualty Company
in late 1977), the purchase for cash of other insurance companies (Home and
Automobile Insurance Company in 1971, Kerkling Reinsurance Corporation,
now named Central Fire and Casualty Company, in 1976, and Cypress
Insurance Company at yearend 1977), and finally through the marketing of
additional products, most significantly reinsurance, within the National
Indemnity Company corporate structure.

相反地，這600%的成長幾乎都是來自於國家產險本身的傳統業務的穩定成長再加上
新創立的公司(包含1970年的Cornhusker產險、1971年的Lakeland火險、1972年
的德州聯合保險、1973年的愛荷華保險及1977年的堪薩斯火險公司等)，以購併方式
買下的(1971年的家庭與汽車保險、1976年現已更名為中央火險的Kerkling再保險以
及1977年的賽普路斯保險公司)，以及最後透過行銷新業務-主要以國家保險名下進行
的再保險業務所得。

In aggregate, the insurance business has worked out very well. But it
hasn’t been a one-way street. Some major mistakes have been made during
the decade, both in products and personnel. We experienced significant
problems from (1) a surety operation initiated in 1969, (2) the 1973
expansion of Home and Automobile’s urban auto marketing into the Miami,
Florida area, (3) a still unresolved aviation “fronting” arrangement, and (4)
our Worker’s Compensation operation in California, which we believe retains
an interesting potential upon completion of a reorganization now in
progress. It is comforting to be in a business where some mistakes can be
made and yet a quite satisfactory overall performance can be achieved. In a
sense, this is the opposite case from our textile business where even very
good management probably can average only modest results. One of the
lessons your management has learned - and, unfortunately, sometimes re-
learned - is the importance of being in businesses where tailwinds prevail
rather than headwinds.

總的來說，保險事業的表現還算不錯，但情況並非全然如此，過去十年來，我們也犯
過一些大錯，不論是在產品或是人員方面，比如說我們在以下方面就曾遇到重大的困
難：(1)1969年推出的保證責任險(2)1973年擴充佛羅里達邁阿密地區的家庭及汽車保
險業務(3)目前尚未解決的航空”前置”安排(4)我們在加州的勞工退休金業務，我們相信
這業務一旦改組完成應該還是相當有潛力。保險這行業雖然小錯不斷，但大致上還是
可以獲得不錯的成果，就某些方面而言，這情況與紡織業剛好完全相反，管理階層相
當優秀，但卻只能獲得微薄的利潤，各位的管理階層所學到的一課，很不幸一再學到
的就是，選擇順風而非逆風產業環境的重要性。

In 1977 the winds in insurance underwriting were squarely behind us.
Very large rate increases were effected throughout the industry in 1976 to
offset the disastrous underwriting results of 1974 and 1975. But, because
insurance policies typically are written for one-year periods, with pricing
mistakes capable of correction only upon renewal, it was 1977 before the full
impact was felt upon earnings of those earlier rate increases.

1977年保險業核保的順風不斷地從後方吹來，保費大幅度的調整在1976年正式生效
後，適時地抵消1974年及1975年慘痛的核保記錄，而由於保單的簽訂通常以一年為
期，所以定價的修正通常必須等到換新約時，所以實際上費率的上漲一直等到1977
年才充分反應在盈餘之上。

The pendulum now is beginning to swing the other way. We estimate
that costs involved in the insurance areas in which we operate rise at close to
1% per month. This is due to continuous monetary inflation affecting the
cost of repairing humans and property, as well as “social inflation”, a
broadening definition by society and juries of what is covered by insurance
policies. Unless rates rise at a comparable 1% per month, underwriting
profits must shrink. Recently the pace of rate increases has slowed
dramatically, and it is our expectation that underwriting margins generally
will be declining by the second half of the year.

可惜的是鐘擺再度開始擺盪到另一方向，我們預估保險理賠成本以每個月1%的幅度
增加，主要的原因除了持續性的通貨膨脹使得修復人體及財產的成本不停上漲，另一
方面社會通膨，亦即社會及陪審團對於保單理賠範圍不斷擴大解釋的傾向，因此除非
費率每個月也能同步上漲1%，否則核保利益肯定會縮水，只是最近保費調漲的速度
明顯趨緩，所以我們預期下半年的核保利潤空間將大幅縮減。

We must again give credit to Phil Liesche, greatly assisted by Roland
Miller in Underwriting and Bill Lyons in Claims, for an extraordinary
underwriting achievement in National Indemnity’s traditional auto and
general liability business during 1977. Large volume gains have been
accompanied by excellent underwriting margins following contraction or
withdrawal by many competitors in the wake of the 1974-75 crisis period.
These conditions will reverse before long. In the meantime, National
Indemnity’s underwriting profitability has increased dramatically and, in
addition, large sums have been made available for investment. As markets
loosen and rates become inadequate, we again will face the challenge of
philosophically accepting reduced volume. Unusual managerial discipline
will be required, as it runs counter to normal institutional behavior to let the
other fellow take away business - even at foolish prices.

講到這裡，我們必須再度將殊榮歸予Phil Liesche，在核保部門Roland Miller以及理
賠部門Bill Lyons的大力協助下，國家產險1977年在傳統的汽車及責任險業務方面又
大放異彩，保費收入不但大幅成長，相較於其他同業不堪1974-75年的危機陸續退出
市場，其優異的核保利益更屬難得，國家產險的核保利益大幅地成長，此外可供投資
的資金亦迅速累積，只可惜這樣的情況維持不了多久，這些業者又會再度捲土重來，
隨著市場緊繃情勢轉為寬鬆，費率又將變得失控，屆時我們又必須回復過去冷靜地接
受保費收入銳減的考驗，嚴格的核保紀律絕對必須維持，如此我們才能抗拒直覺，眼
睜睜地看著其他業者以瘋狂的價格搶走生意。

Our reinsurance department, managed by George Young, improved its
underwriting performance during 1977. Although the combined ratio (see
definition on page 12) of 107.1 was unsatisfactory, its trend was downward
throughout the year. In addition, reinsurance generates unusually high
funds for investment as a percentage of premium volume.

1977年由George Young管理的再保險部門改善了其核保的績效，雖然高達107.1
的綜合比率不算理想(相關定義請參閱第12頁)，但至少趨勢是向下，此外再保險的保
費收入依然貢獻大量的資金以供我們進行投資。

At Home and Auto, John Seward continued to make progress on all
fronts. John was a battlefield promotion several years ago when Home and
Auto’s underwriting was awash in red ink and the company faced possible
extinction. Under his management it currently is sound, profitable, and
growing.

至於John Seward領導的家庭與汽車保險在各個方面都有重大進展，幾年前當該公司
因核保大幅虧損，面臨倒閉危機時，John跳上火線，在他的管理之下，公司的營運漸
上軌道。