Here's How BHRG Fuels Berkshire's Insurance and Investment Power

Berkshire Hathaway’s (BRK.B) insurance portfolio includes GEICO (auto insurance), Berkshire Hathaway Primary Group and Berkshire Hathaway Reinsurance Group (“BHRG”). While GEICO serves as the cornerstone, BHRG is an important pillar, producing underwriting “float” that Warren Buffett has long leveraged for investments.  

BHRG underwrites excess-of-loss, quota-share and facultative reinsurance across 24 countries.  Given the unprecedented nature of catastrophes, profitability can be volatile, but its contribution to insurance pre-tax underwriting earnings has been continually increasing. 

BHRG is also a major contributor to Berkshire’s float—the premiums collected before claims are paid—which can be invested to generate returns without drawing on shareholder capital. Float, a low-cost capital source for the company, has grown from approximately $114 billion at the end of 2017 to $174 billion at the end of the second quarter of 2025, underscoring that Berkshire consistently achieves underwriting profitability. This means that it not only grows float but does so while earning a profit. 

The profits and float generated by BHRG are deployed in growth initiatives (GEICO and other primary insurance units) and for funding strategic acquisitions and making equity investments across the company. 

BHRG’s disciplined and prudent underwriting, financial capacity and efficient capital utilization make it a vital growth engine for Berkshire Hathaway. It not only delivers consistent profitability across insurance operations but also strengthens Berkshire’s ability to invest strategically, diversify its portfolio and compound value through market cycles.

What About BRK.B’s Competitors?

Reinsurance operations are crucial to the growth, stability and profitability of both Arch Capital Group ACGL and Everest Group EG. 

For Arch Capital, reinsurance provides diversified earnings, global reach and capital efficiency, complementing its insurance and mortgage segments. ACGL’s disciplined underwriting and selective risk appetite help deliver consistent profitability and strong returns on equity. 

For Everest Group, the reinsurance division anchors its business model, offering a balanced portfolio across property, casualty, and specialty lines. By leveraging deep client relationships, analytics and prudent risk management, EG achieves stability despite catastrophe volatility. 

For both Arch Capital and Everest Group, reinsurance serves as a strategic growth engine and a key source of long-term value creation.

BRK.B’s Price Performance

Shares of BRK.B have gained 5% year to date, outperforming the industry.

BRK.B’s Expensive Valuation

BRK.B trades at a price-to-book value ratio of 1.53, above the industry average of 1.5. It carries a Value Score of D.

Estimate Movement for BRK.B

The Zacks Consensus Estimate for BRK.B’s third-quarter 2025 EPS has moved 23% north over the past 30 days, while that for fourth-quarter 2025 has witnessed no movement in the same time frame. The consensus estimate for full-year 2025 EPS moved 0.3% north over the past 30 days, while that for 2026 witnessed no movement in the same time frame.
 

The consensus estimates for BRK.B’s 2025 and 2026 revenues indicate year-over-year increases. While the consensus estimate for BRK.B’s 2025 EPS indicates a decline, the same for 2026 suggests an increase.  

BRK.B stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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