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US reinsurers report decline in surplus capital

NEW YORK (Bloomberg) - XL Group plc and Warren Buffett's Berkshire Hathaway Inc. are among US reinsurers reporting a decline in policyholders' surplus after four straight quarterly gains.

The combined surplus of 19 reinsurers declined 1.6 percent in the three months ended June 30 to $99.7 billion from $101.3 billion in the first quarter, the Reinsurance Association of America said yesterday in a report.

National Indemnity Co., owned by Omaha, Nebraska-based Berkshire, reported a 1 percent surplus drop to $61.7 billion.

The surplus, a measure of assets minus liabilities, declined 5.3 percent to $2.12 billion at Ireland-based XL Group's US business.

Reinsurers provide coverage to primary carriers, protecting them from larger claims. An 8.8-magnitude earthquake struck Chile in February, the world's fifth-strongest in a century. Munich Re and Swiss Reinsurance Co., the largest reinsurers, disclosed the biggest claims from the quake.

An explosion on a rig leased by BP plc. in the Gulf of Mexico on April 20 triggered the worst oil spill in US history. Insurers may have as much as $3.5 billion in claims from the spill, according to Moody's Investors Service.