How Warren Buffett Built His Empire – Forbes 1990 — Part Two: Arbitrage Plays

Continued from part one.

Ironically, back in the late 80s early 90s, Warren Buffett wasn't a fan of the insurance sector. During 1990, he commented, "Sometimes it's a good business--and that's not very often--and sometimes it's a terrible business,." Berkshire Hathaway's insurance group experienced an average after-tax underwriting loss of $17 million a year from 1986 to 1988.

Warren Buffett's first insurance acquisitions came in 1967, with the purchase of National Indemnity Co. and National Fire & Marine Insurance Co. Since, he has acquired a large number of insurers and reinsurers, making Berkshire one of the world's largest insurance groups.

But like Henry Singleton, Saul Steinberg, and Shelby Davis, Warren Buffett discovered the benefits of the insurance industry early...