Is GEICO the Cornerstone of Berkshire Hathaway's Insurance Growth?
BRK.B
) insurance portfolio includes GEICO (auto insurance), General Re (reinsurance) and Berkshire Hathaway Reinsurance Group (BHRG). Among these, GEICO serves as the cornerstone, driving significant revenue growth and producing underwriting 'float' that Warren Buffett has long leveraged for investments. As one of the largest auto insurers in the United States, GEICO generates a steady stream of premiums from millions of policyholders, strengthening Berkshire's market position, dispersing risk and supporting competitive pricing alongside high customer retention.
Central to GEICO's success is its efficient, direct-to-consumer business model. By focusing on online sales and advertising rather than agent commissions, it maintains low operating costs, allowing competitive rates while preserving profitability. This operational edge delivers consistent underwriting gains, bolstering Berkshire's overall insurance earnings. The essential nature of auto coverage also ensures resilience, even during economic slowdowns.
GEICO 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. Its expanding premium base ensures a reliable flow of investable funds, thus fueling gains across Berkshire's equities, bonds, and subsidiaries.
In recent years, GEICO's aggressive advertising, strong brand equity, and competitive pricing have increased market share, particularly among younger drivers. With advanced digital tools, telematics and data-driven pricing, it is well-positioned for continued growth.
Through its scale, cost efficiency, and steady float generation, GEICO remains indispensable to Berkshire's insurance operations, supporting both operational performance and long-term capital compounding.
What About BRK.B's Competitors?
Progressive Corporation PGR, one of the largest U.S. auto insurers, remains heavily focused on personal auto. Progressive's performance is fueled by rate increases, rising new personal auto applications from higher advertising spend, targeted non-rate growth actions and its strong network of independent agents driving sustained momentum.
Travelers Companies ' TRV auto insurance drives growth by generating steady premiums and enhancing customer loyalty. Travelers strengthens its market position through competitive pricing, disciplined underwriting and trusted service. Continued innovation in auto coverage ensures that Travelers maintains sustainable expansion within its broader insurance operations.
BRK.B's Price Performance
industry.
Image Source: Zacks Investment Research
BRK.B's Expensive Valuation
BRK.B trades at a price-to-book value ratio of 1.42, above the industry average of 1.5. It carries a Value Score of D.
No Estimate Movement for BRK.B
The Zacks Consensus Estimate for BRK.B's third-quarter and fourth-quarter 2025 EPS has witnessed no movement over the past 30 days. The consensus estimate for full-year 2025 and 2026 EPS has also witnessed no movement over the past 30 days.
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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The Travelers Companies, Inc. (TRV): Free Stock Analysis Report
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