Berkshire Hathaway's Insurance Performance Report 2025
Berkshire Hathaway’s CEO, Greg Abel, recently unveiled a report highlighting a decline in underwriting and investment income within the company's insurance and reinsurance sectors, including GEICO, during 2025. This marks Abel’s inaugural report to investors since succeeding Warren Buffett. Despite staying profitable, Berkshire's insurance operations saw reduced underwriting income and higher combined ratios across personal, commercial, and reinsurance lines.
The report revealed that GEICO accounted for over half of a $1.9 billion decrease in pretax underwriting profits for Berkshire’s property and casualty units, with a 16.5% reduction in pretax profits to $9.7 billion. Abel warned of ongoing growth challenges for the property and casualty units as they venture into 2026.
Abel noted that although GEICO's rate hikes have restored profit margins, they have impacted customer retention. "GEICO’s broad rate increases in recent years have restored margins but come at the cost of lower retention," he stated. Furthermore, he emphasized that GEICO continues to focus on accurately pricing risks for both existing and new clients.
In the commercial insurance domain, while initial 2025 demand was robust with adequate or improving pricing, new capital influx later caused pricing pressures. Abel affirmed, "We have always prioritized underwriting discipline over volume," and foresaw persistent challenges in these business segments.
For the reinsurance sector, Abel reported an increase in available capital, triggering substantial property reinsurance price reductions. This environment anticipates a reduction in reinsurance premium writing. Additionally, GEICO's loss and loss adjustment expense ratio slightly worsened, with the increase in written and earned premiums attributed to a higher number of policies in force.
GEICO’s expense ratio rose by 2.7 points in 2025, primarily due to higher advertising and policy acquisition costs. Meanwhile, GEICO boosted its workforce by nearly 5% in 2025, although its employee count is 30% below numbers from five years ago.
There was a decline in underwriting profits across all of Berkshire's insurance segments, with a notable 32% drop in reinsurance operations. Despite this, Abel highlighted an overall favorable combined ratio of 87.1, which remains below breakeven. Although pre-tax investment income fell by almost 9%, total underwriting and investment income post-taxes saw a 12.9% decline.
Berkshire's operating income, encompassing both insurance and non-insurance operations, dropped by 6% to $44.5 billion, while overall net income decreased by 24% to $67 billion in 2025. Abel reaffirmed the pivotal role of insurance in Berkshire’s strategy, emphasizing patience, customer trust, and sustainable growth amid market fluctuations, underscoring resilience over transient gains.