Berkshire Hathaway, the huge American multinational conglomerate holding company, cut premium written in its property and casualty (P&C) reinsurance business in 2025 as a result of increased competition and lower rates, as new CEO, Greg Abel, warns that the firm will continue to write less reinsurance premium so “long as these phases of the cycle endure”.
Abel took over from Warren Buffett as CEO of Berkshire Hathaway in January 2026, and has now delivered his first letter to shareholders alongside the company’s results for the 2025 financial year.
In his letter, Abel highlights Berkshire’s “extraordinary group of insurance businesses”, but notes that “after several years of needed adjustments to pricing and policy terms”, these trends started to reverse in 2025, which “likely means we will write less property and casualty business for a period of time.”
The CEO went on to state that Berkshire expects its primary insurance businesses “to face continued headwinds in 2026, and potentially beyond,” and warned of similar dynamics in reinsurance.
“The reinsurance sector has attracted significant increases in available capital from both the traditional and alternative markets, which together with a more benign reinsured catastrophe loss burden in 2025 in most major regions has led to significant price declines in property reinsurance. In most casualty reinsurance segments, claims inflation continued to outpace pricing. As long as these phases of the cycle endure, we expect to write less reinsurance premium,” he said.
Nevertheless, 2025 was still another strong year for Berkshire Hathaway’s re/insurance businesses, which together produced pre-tax underwriting earnings of $9.5 billion, compared with $11.4 billion in 2024, and net underwriting earnings of $7.3 billion, a decline of almost 20% from 2024’s $9 billion. Year-on-year, the reinsurance business, the primary insurance business, and GEICO all recorded lower pre-tax underwriting earnings, but again, the performance was still robust.
At Berkshire Hathaway Reinsurance Group, pre-tax underwriting earnings declined by more than 32% year-on-year to $1.9 billion, driven by a decline in property to $3.2 billion from $3.8 billion in 2024, partially offset by higher life and health (L&H) reinsurance earnings of $374 million, compared with $223 million in 2024.
At the same time, pre-tax underwriting losses from the run-off of retroactive reinsurance increased to more than $1 billion, while pre-tax losses from periodic payment annuity contracts increased to $711 million, and variable annuity guarantee reinsurance contracts produced pre-tax earnings of $88 million for the firm in 2025.
Within the P&C reinsurance segment, premiums written fell by $1.7 billion to $20.2 billion in 2025, as net earned premiums declined by $1.8 billion to $20.4 billion.
Berkshire attributes the declines to volume reductions in property, driven by “increased competition and lower rates.”
As noted by Abel in his letter to shareholders, although the California wildfires in January were significant, overall, 2025 was a more benign year for reinsured natural catastrophe losses, partly as a result of the dominance of severe convective storms and other so-called secondary peril losses, which the primary market retained more of last year.
Losses and loss adjustment expenses (LAE) declined by 4.5% year-on-year to $11.7 billion, with losses incurred from significant catastrophe events hitting around $765 million, lower than 2024’s $800 million. Losses and LAE in 2025 were also reduced by $1.1 billion of reductions of estimated ultimate claim liabilities for prior accident years’ claims, driven by lower-than-expected property losses.
At the same time, reinsurance underwriting expenses also decreased, by 9.9% to $615 million, primarily due to the impact of lower premiums earned.
The P&C combined ratio weakened slightly in 2025 to 84.5%, compared with 82.9% in 2024, driven by a higher loss ratio of 57.2% and slightly lower expense ratio of 27.3%.
Turning to the L&H reinsurance arm, premiums written increased by roughly $300 million to $5.3 billion, as premiums earned rose by $271 million to $5.3 billion, primarily due to increases in non-US markets.
Berkshire Hathaway attributes the stronger year-on-year underwriting result to increased earnings from international and US life and health business, reduced losses in US long-term care business, and increased foreign currency exchange gains.
At Berkshire Hathaway Primary Group, the company’s primary insurance arm, pre-tax underwriting earnings fell to $785 million in 2025 from $855 million in 2024, as premiums written decreased slightly to $18.7 billion from $18.8 billion. Premiums earned were flat at $18.7 billion.
Losses and LAE declined by more than 1% year-on-year to $12.5 billion for 2025, while prior accident years’ ultimate loss estimates increased by approximately $190 million in 2025 compared to reductions of $52 million in 2024.
Underwriting expenses rose to $5.4 billion for 2025 from $5.2 billion in 2024, with a higher expense ratio of 28.9% attributable to business mix changes.
Berkshire Hathaway Primary Group’s combined ratio increased to 95.8% in 2025 from 95.4% in 2024, driven by the higher expense ratio, partially offset by a lower loss ratio of 66.9%.
The GEICO business writes property and casualty insurance policies, primarily private passenger automobile insurance, in all 50 states and the District of Columbia, and is typically the main driver of the firm’s insurance underwriting profit, and this was again the case in 2025.
GEICO generated pre-tax underwriting earnings of $6.8 billion in 2025 compared with $7.8 billion in 2024, as premiums written increased by more than 5% to $45.2 billion, driven by an increase in policies-in-force over the past year, and premiums earned increased by over 5% to $44.5 billion.
Losses and LAE at GEICO rose by 6% year-on-year to $32.1 billion, as underwriting expenses increased by 34.2% to $5.5 billion. A higher loss ratio of 72.3% and a higher expense ratio of 12.4% resulted in a combined ratio of 84.7% for GEICO in 2025, higher than 2024’s 81.5%.
In terms of insurance investment income, pre-tax investment income declined by 8.9% in 2025 to $15.3 billion, reflecting lower interest and other investment income, primarily attributable to lower short-term interest rates, and reduced dividend income.
Lastly, Berkshire Hathaway’s float has grown from approximately $171 billion at the end of 2024 to around $176 billion at the end of 2025.
“The environment ahead will reward insurers whose focus remains on growing underwriting profit sustainably, not volume; customer trust and loyalty, not temporary spikes in market share; and long-term resilience, not short-lived opportunism,” said Abel in his letter to shareholders.
