AM Best affirms Berkshire Hathaway life insurers' credit ratings with stable outlook

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Berkshire life insurers' ratings

Highlights

Berkshire Hathaway Life Insurance Company of Nebraska retained its A++/aa+ ratings and First Berkshire Hathaway Life Insurance Company kept A+/aa- ratings, all with stable outlooks from AM Best.
BHLN reported net income above $3 billion for 2024, aided by equity sales, with core net investment income projected to slip to $717.6 million in 2025.
Both insurers benefit from substantial support by National Indemnity Company, reduced new business activity, and conservative balance sheet management, maintaining strong liquidity and credit stability.

Rating actions and operating drivers

As reported by AM Best, Berkshire Hathaway Life Insurance Company of Nebraska kept its Financial Strength Rating of A++ and Long-Term Issuer Credit Rating of aa+, while First Berkshire Hathaway Life Insurance Company retained its A+ Financial Strength Rating and aa- Long-Term Issuer Credit Rating. The outlook on all of the ratings remains stable.

AM Best says BHLN's ratings reflect very strong balance sheet strength, adequate operating performance, a limited business profile and appropriate enterprise risk management. The agency says the insurer continues producing favorable capital growth, with gains from sales of unaffiliated equity holdings helping push annual net income above $3 billion heading into 2024.

It also says BHLN's 2025 performance supports a longer-term pattern of investment income growth from improved net yield on invested assets. Core net investment income slips slightly to $717.6 million in 2025 from $732.0 million, while the company continues accumulating capital without depending on one-time market sales.

The insurer also faces less operational strain across 2024 and 2025 after suspending new business in 2023. AM Best says that approach lets BHLN run an efficient balance sheet while it waits for more favorable macroeconomic conditions for its structured settlement business.

Parent support and sector implications

For First Berkshire Hathaway Life, AM Best says the ratings reflect strongest balance sheet strength, marginal operating performance, a limited business profile and appropriate enterprise risk management. The agency notes that 2024 marks the company's second full year without new sales, and that improved investment income helps deliver its best net earnings result in more than five years, at nearly $6.3 million.

Despite that improvement, AM Best says the insurer still trails the industry average for return on equity because of its large excess capital position. It adds that the company's balance sheet remains highly liquid, with most invested assets held in cash and short-term securities.

AM Best also says both BHLN and First Berkshire Hathaway Life continue receiving substantial financial, operational and other resource support from National Indemnity Company. That backing, combined with conservative balance sheet management and reduced new business activity, underpins the stability of the two Berkshire Hathaway insurers' credit profiles.

Our earlier report covered Fitch’s multiple rating actions on NewDay Partnership Master Issuer Plc (VFN P3 V1) after structural changes altered note protection levels. We explained how the advance-rate reshuffle led to an upgrade of the class B notes, a downgrade of the class C notes, and a withdrawal of the class E rating, while also noting improving charge-off performance and the ongoing operational and retailer concentration risks within the securitisation.

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