I think he's saying that Berkshire's insurance is so large and diversified that even something like a earthquake in California would not have a big impact on its cash position. I'm surprised it would be capped at 3% though.
I believe he's saying that the year-over-year float won't go below 3%, not that a very big impact event won't hurt the float for a period of a few months. Part of this is because policies are re-issued every year which means that they can increase premiums if needed and drop high risk customers as he's pointed out in previous letters.
