The insurance business has been good to Warren Buffett. For decades, his stable of carriers at Berkshire Hathaway Inc. have provided him billions of dollars to invest. They’ve also turned an underwriting profit every year since 2002.

That streak could be coming to an end.

On Friday, Berkshire is likely to report big claims costs during the third quarter at its insurance subsidiaries because of natural disasters including Hurricanes Harvey and Irma. Any red ink will add to the challenges at the conglomerate’s largest segment, which already posted an underwriting loss in the first half.

“Obviously, this quarter is going to be a loss” on underwriting, said John Fox, the chief investment officer at Fenimore Asset Management in Cobleskill, New York, which oversees about $2.5 billion including Berkshire shares. “How big that is, I don’t know at this point. I’m counting on a few billion.”

For years, Buffett has gloated to shareholders about the company’s lucrative insurance subsidiaries like Geico and Berkshire Hathaway Reinsurance Group. In addition to racking up more than $100 billion in float—the premiums that carriers get to invest while waiting to pay claims—the businesses have churned out about $18 billion in underwriting income over the past 14 years.

Risk Evaluation

“When such a profit is earned, we enjoy the use of free money—and, better yet, get paid for holding it,” Buffett wrote in his annual letter to investors in February. The billionaire chairman credits the underwriting success to treating risk evaluation like “Old Testament style” religion.

That discipline was no match for Mother Nature last quarter. In October, analysts at Barclays Plc slashed third-quarter earnings estimates for Berkshire by a third, citing, in part, the cost of natural disasters. For the year, they estimate a $2.7 billion pretax underwriting loss.

Buffett didn’t respond to a request for comment.

As an industry, insurers may incur claims of as much as $120 billion after one of the worst U.S. hurricane seasons on record, according to catastrophe-modeling firm RMS. Travelers Cos. temporarily suspended its share-buyback program while it assessed storm damage. Munich Re, the world’s largest reinsurer, said natural disasters would cause a third-quarter loss.

Berkshire is more diversified than its competitors and is still expected to turn an operating profit in the period. The average estimate is $2,346 per Class A share, according to three analysts surveyed by Bloomberg. But the insurance results could drag down any gains at the company’s railroad, electric utilities and motley collection of manufacturing, retail and service businesses, which tend to be steady earners.

Silver Lining

While he hasn’t given any estimate of claims costs, Buffett has hinted at the scope of the damage. In late August, he told CNBC he wouldn’t be surprised if Geico had 50,000 auto claims from Hurricane Harvey alone, many of them total losses.

There’s a silver lining, though. A glut of capital has caused a price war in the reinsurance industry. Rather than take the same risk for less money, Buffett has said his company is walking away from some business. The latest losses could push up rates again for coverage and convince Berkshire to jump back into the market, Fox said.

Another headwind for Berkshire’s insurance units is a large reinsurance deal struck in January.

Buffett’s company got about $10 billion upfront to backstop American International Group Inc. on policies written in the past. Accounting charges related to that contract and similar agreements are likely to lower underwriting results by almost $1 billion before tax this year, Berkshire estimated in August. Buffett has said the costs related to these sorts of deals are worth it because they provide access to lots of float.

With Berkshire’s shares up 15 percent this year and trading near a record high, investors aren’t sweating the challenges in the insurance business.

Berkshire’s track record is still solid, said Jim Shanahan, an analyst at Edward Jones. Many carriers don’t operate at an underwriting profit, relying entirely on investment income to stay in the black.

“They’ve clearly been a very strong underwriter,” Shanahan said of Berkshire. “The industry overall hasn’t.”