BUFFETT: Damage from Harvey will last ‘for a long time’


Warren Buffett
Mario
Anzuoni/Reuters


OMAHA, Neb. (AP) — Billionaire Warren Buffett says the storm
damage in Texas is staggering, but he isn’t sure yet how much
insurance companies will have to pay in claims.

Buffett’s Berkshire Hathaway conglomerate owns Geico and several
other insurers, so his company will be helping people rebuild.
Buffett appeared on CNBC Wednesday before dining with the person
who paid nearly $2.7 million in a charity auction for lunch with
Buffett.

“The effects of this are going to go on for a long time,” Buffett
said.

The investor expects that 50,000 of the roughly 500,000 vehicles
Geico insures in the area will be total losses. But Buffett
predicted there will also be large uninsured losses after this
storm.

Buffett said Berkshire hasn’t written much catastrophe insurance
in recent years because prices were too low, so that will limit
the Omaha, Nebraska-based company’s exposure. By contrast,
Berkshire recorded $3.4 billion in hurricane-related losses in
2005 when Hurricanes Katrina, Rita and Wilma struck the Gulf
Coast.

Buffett predicted that the damage from Harvey won’t derail the
relatively steady 2 percent growth in the U.S. economy, but it
will be devastating to some individuals and families.

Buffett is Berkshire’s chairman and CEO. The conglomerate owns
more than 90 companies, including BNSF railroad, several major
utilities and an assortment of manufacturing and retail
companies.

Earlier this week, Berkshire became the largest shareholder in
Bank of America to go along with its major stake in Wells Fargo.
Buffett said he likes both banks and plans to continue holding
their shares.

“It will be a long, long time before we sell Bank of America
shares,” he said.

Buffett also expressed confidence in one of Berkshire’s few
high-tech investments, Apple. Buffett bought more shares of the
phone and computer maker in the second quarter to give his
company 130.2 million shares.

“I’ve never sold an Apple share,” he said.

Buffett celebrated his 87th birthday Wednesday at the charity
lunch that benefits the Glide Foundation, which helps homeless
people in San Francisco. Buffett has raised more than $25 million
for Glide through the auctions.

The winner of this year’s lunch auction has remained anonymous.
That person received a relative bargain compared to last year’s
record bid of $3,456,789, which tied for the record set in 2012.

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