(Bloomberg) -- The insurance business has been good toWarren Buffett.

For decades, his stable of carriers at Berkshire Hathaway Inc.have provided him billions of dollars to invest. They’ve alsoturned an underwriting profit every year since 2002.

That streak could be coming to an end.

Related: New report details financial impact of September'shistorical natural disasters

On Friday, Berkshire is likely to report big claims costs duringthe third quarter at its insurance subsidiaries because of naturaldisasters including Hurricanes Harvey and Irma. Any red ink willadd to the challenges at the conglomerate’s largest segment, whichalready 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 AssetManagement in Cobleskill, New York, which oversees about $2.5billion including Berkshire shares. “How big that is, I don’t knowat this point. I’m counting on a few billion.”

For years, Buffett has gloated to shareholders about thecompany’s lucrative insurance subsidiaries like Geico and BerkshireHathaway Reinsurance Group. In addition to racking up more than$100 billion in float — the premiums that carriers get toinvest while waiting to pay claims — the businesses havechurned out about $18 billion in underwriting income over the past14 years.

Risk evaluation

“When such a profit is earned, we enjoy the use of freemoney — and, better yet, get paid for holding it,” Buffettwrote in his annual letter to investors in February. Thebillionaire chairman credits the underwriting successto treating risk evaluation like “Old Testament style”religion.

Related: U.S. P&C industry marks first half of 2017 with$5.1 billion underwriting loss

That discipline was no match for Mother Nature last quarter. InOctober, analysts at Barclays Plc slashed third-quarter earningsestimates for Berkshire by a third, citing, in part, the cost ofnatural disasters. For the year, they estimate a $2.7 billionpretax underwriting loss.

Buffett didn’t respond to a request for comment.

$120B in insurance industry claims

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

Related: Munich Re says storms may erase profit, threaten2017 target

Berkshire is more diversified than its competitors and is stillexpected to turn an operating profit in the period. The averageestimate is $2,346 per Class A share, according to three analystssurveyed by Bloomberg. But the insurance results could drag downany gains at the company’s railroad, electric utilities and motleycollection of manufacturing, retail and service businesses, whichtend to be steady earners.

Silver lining

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

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

Large reinsurance deal

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

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

Related: AIG to pay Berkshire $9.8 billion in insurancetransfer deal

With Berkshire’s shares up 15% this year and trading near arecord high, investors aren’t sweating the challenges in theinsurance business.

Berkshire’s track record is still solid, said Jim Shanahan, ananalyst at Edward Jones. Many carriers don’t operate at anunderwriting profit, relying entirely on investment income to stayin the black.

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

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.