BRK.B or AIG: Which Insurance Stock Should Investors Bet On?

Better pricing, climate change, which exposes insurers to catastrophe losses, and accelerated digitalization are likely to have an impact on the insurance industry. The Fed has been lowering interest rates and has hinted at the possibility of more throughout the year. Yet Berkshire Hathaway Inc. BRK.B and American International Group, Inc. AIG — two insurance behemoths — are expected to stay strong.
  
Pricing plays an important part in their profitability. Per the Global Insurance Market Index by Marsh, global commercial insurance rates fell 4% in the fourth quarter, the sixth straight quarter of price decline, primarily attributable to reinsurer growth and the entry of new insurers, which increased competition.

Given the increased adoption of technology, merger and acquisition (M&A) activity is projected to witness momentum in 2026, driven by a higher number of technology-driven deals, per a report by Willis Towers Watson’s Quarterly Deal Performance Monitor.

Yet, as an investment option, which stock, BRK.B or AIG, is more attractive for long-term insurance-focused investors? Let’s closely look at the fundamentals of these stocks.

Factors to Consider for BRK.B

Berkshire Hathaway is a highly diversified conglomerate with more than 90 subsidiaries, spanning industries such as insurance, utilities, railroads, manufacturing and consumer products. This wide-ranging business portfolio helps minimize concentration risk and provides resilience across economic cycles.

Insurance remains the foundation of Berkshire’s operations, accounting for roughly one-fourth of total revenues. The segment is well-positioned for sustained growth, supported by increasing demand, disciplined underwriting and favorable pricing trends. Continued expansion in insurance operations generates a growing float, which strengthens earnings, enhances return on equity and provides substantial capital for investments and acquisitions. This float-based structure has long been a defining competitive advantage for the company.

Supported by a substantial cash position, Berkshire actively pursues acquisitions of entire businesses and selectively increases stakes in companies with durable earnings, strong competitive moats and attractive returns on equity. Large-scale acquisitions open new growth opportunities, while smaller bolt-on deals reinforce and expand existing businesses.

Warren Buffett’s investment philosophy centers on identifying undervalued companies with solid long-term prospects. Recent investments in Japanese trading houses reflect this disciplined, value-oriented approach. Long-term holdings in Coca-Cola, American Express, Apple, Bank of America, Chevron and Occidental Petroleum further underscore Berkshire’s commitment to high-quality businesses.

The company’s financial position remains strong, with more than $100 billion in cash, modest leverage and an excellent credit profile. Although its return on equity of 7.3% trails the industry average of 8%, performance has improved over time. BRK.B shares have gained 1% in the past month.

Factors to Consider for AIG

American International Group, better known as AIG, is a leading global insurance organization, providing a wide range of property casualty insurance, life insurance, retirement solutions, and other financial services to customers in more than 80 countries and jurisdictions.

The company has been focusing on implementing stricter underwriting discipline, divesting non-core businesses, reducing debt, launching strategic transformation initiatives and modernizing operations and technology infrastructure, as well as investing heavily in data and digital strategies. These have led AIG to generate $2 billion annually in underwriting profit, on average, over the past three years.

AIG is also benefiting from reinvesting assets at higher yields, including increasing asset allocation to private credit at attractive spreads. 
AIG stated that its deconsolidation of Corebridge accelerated its AIG Next initiative, resulting in $450 million in exit run-rate savings in 2024.  Net margin became positive in the second quarter of 2025 and continued to be so in the third quarter of 2025.

A solid capital deployment strategy supports growth and helps return wealth to shareholders.  Over the first nine months of 2025, it paid $734 million in dividends and repurchased shares worth $5.3 billion. Its return on equity of 9.8% lags the industry average. AIG has gained 8.5% in the past month.

Estimates for BRK.B and AIG    

The Zacks Consensus Estimate for BRK.B’s 2026 revenues implies a year-over-year increase of 4.7%, while that for EPS implies a year-over-year decrease of 0.1%. EPS estimates witnessed no movement over the past 30 days. 

The Zacks Consensus Estimate for AIG’s 2026 revenues implies a 5.3% year-over-year increase, while that for EPS implies a year-over-year increase of 10.2%. EPS estimates have moved 3 cents south over the past 30 days. 
 

Are BRK.B and AIG Shares Expensive?

Berkshire is trading at a price-to-book multiple of 1.54, above its median of 1.44 over the last five years. AIG’s price-to-book multiple sits at 1.03, above its median of 0.98 over the last five years.

Conclusion

Holding shares of Berkshire Hathaway adds dynamism to shareholders’ portfolios. It gives the feel of investing in mutual funds while rewarding investors with higher returns. However, investors are still waiting to see how the conglomerate fares under the leadership of the new CEO.  

Meanwhile, strategic business de-risking, acquisitions, cost-control efforts, investment in digitalization and accelerated capital deployment drive AIG. The AIG Next initiative is designed to save costs, reflected in the net margin improvement. It has a solid capital deployment strategy that enhances shareholders' value.

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, AIG scores higher than BRK.B. Price appreciation and better valuation make AIG more appealing. 

Berkshire Hathaway carries a Zacks Rank #4 (Sell). AIG, with a Zacks Rank #3 (Hold), 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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