CHICAGO--(BUSINESS WIRE)--July 18, 2003--Fitch Ratings has
affirmed the 'AAA' insurer financial strength ratings of the National
Indemnity Company and the six associated members of the National
Indemnity Group (National Indemnity). The Rating Outlook is Stable.
The ratings continue to reflect National Indemnity's enormous
capital base, excellent reinsurance market position, solid liquidity
profile, low operating leverage and underwriting discipline.
Offsetting these positives is National Indemnity's high investment
risk associated with their large equity allocation and the volatile
nature of the group's high-level catastrophe excess-of-loss
reinsurance product line.
National Indemnity reported a pre-tax (GAAP) underwriting gain of
$534 million at year-end 2002 versus underwriting losses of $647
million in 2001. The vast majority of the gain in 2002 stemmed from
National Indemnity's Catastrophe & Individual Risk Unit, which saw
significant opportunities after the events of Sept. 11, 2001.
National Indemnity's non-catastrophe reinsurance business also
continues to be an attractive product line due to the anticipated
extended claim payment period that allows for large future investment
income. National Indemnity's high operating earnings in this line of
business is a product of historically small underwriting losses offset
by the large amounts of investment income on National Indemnity's
substantial invested asset base.
National Indemnity estimates its maximum after-tax exposure to a
single catastrophic event to be $3.25 billion. While material, with
well over $20 billion in policyholders' surplus, National Indemnity
could easily absorb such a loss. Further, this type of loss may even
be a boon to National Indemnity's business if industry pricing
significantly increases and causes a 'flight to quality' that would
benefit only the most highly capitalized competitors. Fitch believes
recent experience in National Indemnity's Catastrophe & Individual
Risk segment is evidence of this phenomenon.
National Indemnity offers property catastrophe and other
reinsurance, as well as, certain forms of direct commercial automobile
and truck insurance. National Indemnity represents the largest
component (based on statutory surplus) of the insurance operations of
Berkshire Hathaway, Inc. (NYSE: BRK/A), a diversified holding company
based in Omaha, Neb. BRK/A's other significant insurance operations
include GEICO Corporation, a personal auto insurer, and General Re
Corporation, a global reinsurance and related risk management
operation.
Ultimate parent BRK/A's capitalization is exceptional. As of
first-quarter 2003, BRK/A reported GAAP equity of $65.4 billion.
Additionally, financial leverage remains low, as evidenced by BRK/A's
6.7% debt-to-total capital ratio at first-quarter 2003. Fitch believes
that BRK/A's superior capitalization and financial flexibility enhance
the credit quality of core subsidiaries, including National Indemnity,
within the BRK/A organization.




Entity/Issue/Type Action Rating/Outlook

--Insurer financial strength rating

Columbia Insurance Company Affirm 'AAA'/Stable;

National Fire and Marine Ins. Co. Affirm 'AAA'/Stable;

National Indemnity Company Affirm 'AAA'/Stable;

National Indemnity of Mid America Affirm 'AAA'/Stable;

National Indemnity of the South Affirm 'AAA'/Stable;

National Liability and Fire Ins. Co. Affirm 'AAA'/Stable;

Wesco-Financial Insurance Company Affirm 'AAA'/Stable.



The noted ratings were initiated by Fitch as a service to users of
Fitch's ratings and are based primarily on public information.