Warren Buffett warns of natural or human-made ‘megacatastrophe,’ and says our losses will be huge

| February 25, 2019 | Leave a Comment

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Date of Publication: February 23, 2019

Year of Publication: 2019

Author(s): Eric Brodwin

Newspaper: Business Insider

Record-breaking investor and Berkshire Hathaway CEO Warren Buffett released his yearly letter on Saturday, and in it he warned about the prospect of “The Big One” — a major hurricane, earthquake, or cyber attack that he said “will dwarf hurricanes Katrina and Michael.”

“When such a megacatastrophe strikes, we will get our share of the losses and they will be big — very big,” Buffett wrote.

Although such a disaster could happen tomorrow or decades from now, one thing is sure, he said: the catastrophe is inevitable. Yet Buffett said he had a plan for such an outcome.

“Unlike many other insurers,” he wrote, “we will be looking to add business the next day.” That funding, he said, will come from deferred income taxes, liabilities that Berkshire Hathaway will eventually pay but are currently interest-free.

“The bottom line is it’s going to be bad everywhere,” Bruce Riordan, the director of the Climate Readiness Institute at the University of California, Berkeley, told Business Insider two years ago.

“It’s a matter of who gets organized around this,” Riordan said.

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