AM Best Reaffirms Ratings for Berkshire Hathaway Life Insurance
AM Best has reaffirmed the Financial Strength Rating of A++ (Superior) and the Long-Term Issuer Credit Rating of “aa+” (Superior) for Berkshire Hathaway Life Insurance Company of Nebraska (BHLN), headquartered in Omaha. Additionally, the FSR of A+ (Superior) and the Long-Term ICR of “aa-” (Superior) for First Berkshire Hathaway Life Insurance Company (First Berkshire Hathaway Life) in New York have been reconfirmed. The outlook for both companies' ratings remains stable.
BHLN's reaffirmed ratings are supported by its robust balance sheet, consistent operational performance, and diligent enterprise risk management (ERM). The company's capital witnessed substantial growth, significantly aided by gains from divestments in unaffiliated equity holdings, resulting in net income exceeding $3 billion for the previous year. This growth highlights a sustainable trend of increasing investment income, despite the core net investment income reducing to $717.6 million from the prior year's $732 million, ensuring capital retention without dependency on singular market sales.
The strategic pause in new business activities since 2023 has allowed BHLN to maintain an efficient balance sheet throughout 2024 and 2025, as it anticipates improved economic conditions for its structured settlement operations. For First Berkshire Hathaway Life, the ratings reflect a similarly strong balance sheet, consistent yet modest operational performance, and strategic enterprise risk management.
In 2024, the company marked its second consecutive year of halting new sales, which, combined with better investment income, resulted in a net earnings peak of approximately $6.3 million, its highest in over five years. Despite these achievements, its return on equity trails the industry average due to its retention of excess capital. The balance sheet remains liquid, predominantly comprising cash and short-term investments. Both BHLN and First Berkshire Hathaway Life benefit from significant financial and operational backing from their parent company, National Indemnity Company.
The publication of these credit ratings is available on AM Best's website, where one can find detailed disclosures about each rating issued. For further insights into the methodology and proper application of these ratings, AM Best provides comprehensive guides and resources. AM Best operates as a global rating agency, a news outlet, and a data analytics provider, focused mainly on the insurance sector, with a presence in over 100 countries.