Can Float Fuel Berkshire's Long-Term Growth and Value Creation?

Berkshire Hathaway Inc. (BRK.B) is a diversified conglomerate that is one of the largest property and casualty insurers globally. Continued insurance business growth fuels an increase in float, the pool of insurance premiums held before claims are paid, which is one of the low-cost capital sources for the company. On a consolidated basis, float has grown from approximately $114 billion at the end of 2017 to $173 billion at the end of the first quarter of 2025. 

Berkshire insurance businesses represent about one-quarter of Berkshire’s total revenues, including GEICO (auto insurance), General Re (reinsurance), and Berkshire Hathaway Reinsurance Group. Berkshire consistently achieves underwriting profitability, meaning it not only grows float but does so while earning a profit. This makes its float both stable and low-cost, enhancing its utility as a long-term funding mechanism. Though recorded as liabilities, float effectively serves as an interest-free source of capital that can be invested elsewhere. 

The strategic use of float has powered Berkshire’s long-term growth. With a huge cash hoard, Berkshire Hathaway has deployed the float by acquiring entities that have consistent earning power and generate impressive returns on equity. Its opportunistic investments range from Coca-Cola and Apple to BNSF Railway and utilities.

Far from being just a by-product of its insurance operation, float is a foundational element of Berkshire’s investment strategy and long-term value creation. Given its sturdy insurance operations and supported by disciplined underwriting and Buffett’s capital allocation acumen, float continues to be one of the most powerful engines for compounding value and sustaining a competitive edge.

What About Competitors?

Chubb Limited CB and The Travelers Companies TRV are two other notable companies in the insurance space. 

Chubb Limited’s disciplined approach to capital deployment emphasizes strong underwriting, prudent reserve practices, and selective acquisitions to broaden its global presence and enhance specialty capabilities. Chubb also prioritizes long-term value creation through consistent shareholder returns via dividends and buybacks, while investing in technology and risk management to drive sustainable growth.

The Travelers Companies deploys capital prudently by focusing on disciplined underwriting, accurate risk assessment, and data-informed pricing, ensuring stable profitability and financial resilience. Travelers drives long-term value through continued investments in technology and analytics, while consistently returning excess capital to shareholders via dividends and share buybacks.

BRK.B’s Price Performance

Shares of BRK.B have gained 7.6% year to date, outperforming the industry.

BRK.B’s Expensive Valuation

BRK.B trades at a price-to-book value ratio of 1.59, above the industry average of 1.55. It carries a Value Score of D.

Estimates Movement for BRK.B

The Zacks Consensus Estimate for BRK.B’s second-quarter and third-quarter 2025 EPS has moved down 3% and 0.3%, respectively, over the past 30 days. The consensus estimate for full-year 2025 has increased 0.2% and the same for 2026 has moved 2.7% higher.
 

The consensus estimates for BRK.B’s 2025 and 2026 revenues indicate a year-over-year increase. 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research