BRK.B or MKL: Which Insurance-Driven Conglomerate Stands Out?

The Federal Reserve has cut interest rates twice so far in 2025, and there is a probability of more. Meanwhile, equity markets continue to perform satisfactorily due to economic growth. 

Better pricing, growing climate-related risks and rapid digitalization have been influencing the insurance industry's course through 2025. While insurers continue to face catastrophe losses, improved pricing is supporting profitability. 

Against this backdrop, Berkshire Hathaway Inc. BRK.B and Markel Group MKL — two insurance-driven companies — are expected to maintain their strength.

With digital innovation accelerating across the industry, merger and acquisition (M&A) activity is likely to pick up, especially in technology-driven transactions, according to Willis Towers Watson’s Quarterly Deal Performance Monitor. 

But for long-term insurance-focused investors, which stock offers the more compelling opportunity? Let’s take a closer look at both companies' fundamentals.

Factors to Consider for BRK.B

Berkshire Hathaway is a deeply diversified conglomerate with ownership in more than 90 subsidiaries across insurance, energy, transportation, manufacturing, and consumer products. This wide industry exposure reduces concentration risk and provides strong stability through varying economic environments. Insurance remains the cornerstone of the business, accounting for roughly one-fourth of total revenues and supplying the company with its most important strategic asset — insurance float.

Outside of insurance, Berkshire’s broad mix of operating companies generates reliable cash flows that help shield overall performance from sector-specific disruptions. Under Warren Buffett’s leadership, the firm has consistently followed a disciplined, value-driven investment approach, targeting businesses and securities with durable fundamentals and attractive long-term potential.

Berkshire has been actively reshaping its investment portfolio to enhance income generation and global diversification. It has exited its position in Chinese EV giant BYD and reduced holdings in Apple and Bank of America, while steadily building positions in several Japanese trading companies.

A major financial strength for Berkshire is its growing insurance float—the capital held between premium intake and claims payments—which increased from approximately $114 billion in 2017 to about $176 billion by the thirdquarter of 2025. This float provides a significant source of low-cost funding that Berkshire deploys into high-quality investments, including more than $100 billion in short-term U.S. Treasuries and other government-backed securities, representing nearly 90% of recent capital allocations.

With over $100 billion in cash, minimal leverage and an exceptional credit standing, Berkshire maintains one of the strongest balance sheets in corporate America. Its disciplined share repurchase policy highlights management’s prudent capital deployment and ongoing commitment to long-term shareholder value creation.

Berkshire’s return on equity of 7.3% lags the industry average of 8.1% but the company has improved its returns over time. BRK.B shares have gained 13.2% year to date, outperforming the industry’s increase of 7.7%.

Factors to Consider for MKL

Just like Berkshire, Markel is a holding company comprising diverse businesses and investments, with the specialty insurance business being the core. Its insurance business is the foundation on which the company has built businesses and assets that enhance Markel Group’s strength and resilience. The other pillars of the company are Investments and Markel Ventures.

Markel Insurance’s impressive performance can be attributed to its focus on complex, niche, and underserved segments, improved pricing and new business growth. Maintaining a combined ratio below 100% underscores its commitment to continued profitability.  Markel looks to double the size of its insurance operations and thus targets $10 billion of annual insurance premiums in five years. This should lead to $1 billion of annual underwriting profit. The company expects to achieve this goal primarily through organic growth of its existing profitable operations. Thus, it discontinued operations that it believes do not meet its criteria for profitability.

Its investment operations manage the capital held within its underwriting operations, as well as capital held by the Markel Group holding company. It invests the fund in a balanced mix of equities and fixed income, ensuring proper returns.

Markel Ventures acquires interests in high-quality, specialized businesses that operate in a variety of different industries — manufacturing, services, transportation and consumer products. These businesses generate stable, recurring cash flows independent of insurance cycles, adding resilience and diversification. Over time, Markel Ventures has grown into a meaningful contributor to revenues, earnings and book value per share growth.

Markel boasts a solid balance sheet with rising liquidity. Banking on a strong capital position, the company engages in share buybacks, a prudent way to distribute wealth to its shareholders. However, it presently prefers to invest in organic growth initiatives for its Insurance business.

Markel’s return on equity of 7.8% lags the industry average of 36.7%. MKL shares have gained 20.6% year to date but underperformed the industry.

Estimates for BRK.B and MKL

The Zacks Consensus Estimate for BRK.B’s 2025 revenues implies a year-over-year increase of 4.8% while that for EPS implies a year-over-year decrease of 6%.  However, EPS estimates have moved 1.5% north in the past 30 days. 

The Zacks Consensus Estimate for MKL’s 2025 revenues implies a year-over-year increase of 2.6% and that for EPS implies a year-over-year increase of 23%.  EPS estimates have moved 5.6% north in the past 30 days. 

Are BRK.B and MKL Shares Expensive?

Berkshire is trading at a price-to-earnings multiple of 24.63, above its median of 22.48 over the last five years. MKL’s price-to-earnings multiple sits at 19.24, higher than its median of 17.24 over the last five years.

Conclusion

Holding shares of Berkshire Hathaway adds dynamism to shareholders’ portfolios. It is led by Warren Buffett, who has been creating tremendous value for shareholders over nearly six decades with his unique skills. However, all eyes are now on how the behemoth fares when Greg Abel succeeds Warren Buffett as the CEO of Berkshire, starting Jan. 1, 2026. Warren Buffett will continue to be the company's executive chairman. BRK.B has a VGM Score of D.

Markel benefits from its niche focus and effective management of insurance risk. It banks on the strength of its underwriting and investment operations, which position it well for long-term growth. Markel strives to grow via acquisitions and organic initiatives to diversify its portfolio and expand its international footprint. Markel has a VGM Score of A.

On the basis of return on equity, which reflects a company’s efficiency in generating profit from shareholders' equity as well as gives a clear picture of the company's financial health, MKL scores higher than BRK.B. 
 
Though these stocks carry a Zacks Rank #3 (Hold) each, in terms of price appreciation, MKL has an edge over BRK.B. 

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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