Latest news with #AjitJain
Globe and Mail
2 days ago
- Business
- Globe and Mail
Is Berkshire Hathaway Stock a Buy Now?
It has been a few weeks since Warren Buffett shocked Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) investors by announcing his intention to step down as CEO at the end of 2025 after more than 60 years at the helm of the massive conglomerate. Berkshire's stock reacted negatively after the announcement and remains about 7% below where it was before the company's annual meeting, where the news was revealed. And it's worth noting that this is during a period when the S&P 500 gained about 2%. Obviously, the leadership of the legendary billionaire investor is a big reason many people own the stock. However, the company's succession plan has been in place for a long time, and in the foreseeable future, not much is really changing even though Warren Buffett is stepping down. So here's a summary of why I'm not planning to sell a single share of Berkshire, and why investors may want to consider adding after the post-Buffett dip. A diverse and recession-resistant portfolio, all in one stock Berkshire Hathaway owns more than 60 subsidiary business, according to its website, and it's important for investors to realize that all of its businesses have their own leadership teams that largely operate independently of Berkshire's central office. In other words, Buffett has virtually nothing to do with the day-to-day operations of GEICO, Dairy Queen, Duracell, or any of Berkshire's other businesses. Ajit Jain has been in charge of insurance operations, and Greg Abel, the incoming CEO, has already been in charge of non-insurance operations, so there really isn't that much changing with Buffett's departure. Most of Berkshire's businesses are rather recession resistant. For example, GEICO will keep collecting auto insurance premiums and Berkshire Hathaway Energy will receive payment for its utility services, even in an economic downturn. In addition to its businesses, Berkshire has a large portfolio of common stocks, as well as about $348 billion in cash on its balance sheet. The stock portfolio is managed by Buffett along with two portfolio managers, Todd Combs and Ted Weschler, and while Abel will have the final say on capital allocation, it's likely that the two managers will play a somewhat larger role in the stock portfolio. They've both established solid track records of stock-picking so far, and this could ultimately be a net positive for investors, as both have a somewhat more modern (that is, tech-centric) stock approach. Finally, Berkshire's cash gives management unprecedented financial flexibility to take advantage of opportunities as they arise. However, with interest rates still relatively high and the cash stockpile earning well in excess of $10 billion in annual interest income for Berkshire, Abel and his team aren't likely to be in a big rush to put it to work. But if a recession or market crash arrives, no company will have as much financial firepower as Berkshire. It's cheaper than you might think At the current share price, Berkshire has a market cap of $1.085 trillion, making it the only non-technology company in the trillion-dollar club. But just because it has a 13-figure valuation doesn't necessarily mean it's an expensive stock. Here's why. Two of the three components of Berkshire are very easy to value. It has about $348 billion in cash, and the current market value of the stock portfolio is just under $277 billion as of this writing, not including an undisclosed "secret stock" position Berkshire is accumulating. Backing these two numbers out of the valuation shows that the market is valuing Berkshire's operating businesses at $460 billion. Over the past four quarters, the company has produced about $33 billion in operating profit, excluding investment income, which mainly comes from interest on its cash. So that means Berkshire trades for less than 14 times earnings, at least in terms of its fully owned businesses. Plus, there's a big case to be made that Berkshire could unlock significant profitability from its massive insurance business by improving its technology. The bottom line I've said before that if I could only own one stock, it would be Berkshire. And although I own far more than just one stock, Berkshire is one of my largest investments and I have no plans to change that. I'd even go so far as to say that it's never a bad time to buy shares of Berkshire. It holds up better than most other stocks during most downturns and has a solid history of coming out even stronger on the other side. The bottom line is that Berkshire offers a diverse collection of rock-solid businesses all in one investment, and it has unmatched financial flexibility. With all the right pieces in place for continued success, Berkshire Hathaway could be a smart buy on any weakness. Should you invest $1,000 in Berkshire Hathaway right now? Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor 's total average return is982% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Yahoo
7 days ago
- Automotive
- Yahoo
Warren Buffett Was Asked If Self-Driving Cars Will Shift Insurance To 'Product Liability' — 'There's No Question... It's Going to Change Dramatically'
As self-driving cars inch closer to the mainstream, one of the biggest unanswered questions isn't just how they'll navigate traffic—but how they'll reshape risk. If there's no driver behind the wheel, is it still "driver error"? And if the software crashes, will the insurer or the carmaker pick up the tab? Earlier this month at the Berkshire Hathaway (NYSE:BRK, BRK.B)) annual shareholders meeting, that question was posed to Warren Buffett and Ajit Jain, the company's vice chairman of insurance. "Wouldn't what we call auto insurance today just become product liability for autonomous vehicles and autonomous software companies?" the attendee asked. Don't Miss: Hasbro, MGM, and Skechers trust this AI marketing firm — Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – Ajit answered first, laying it out clearly: "There's no question that insurance for automobiles is going to change dramatically once self-driving cars become a reality," he said. "Most of the insurance that is sold and bought revolves around operator errors... To the extent these new self-driving cars are more safe and are involved in fewer accidents, that insurance will be less required. Instead, it'll be substituted by, as you mentioned, product liability." He confirmed that Geico and other insurers are already trying to prepare for the shift—from covering human mistakes to covering technology failures. "We move from providing insurance for operator errors and be more ready to provide protection for product errors and errors and omissions in the construction of these automobiles," he said. Trending: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Buffett followed up with a bigger-picture take on how Berkshire thinks about change—across all its businesses. "We expect change in all our businesses," Buffett said. "If the game didn't change at all, it really wouldn't be very interesting." He compared the need for change to sports: if every swing in baseball resulted in a home run, or every golf shot became a hole-in-one, the game wouldn't be worth playing. Challenges keep it engaging—and thinking through those challenges is part of what keeps companies and people sharp. "Your brain would turn to mush if you didn't have a few problems now and then," he added. Buffett acknowledged that while auto insurance will change, it's striking how little it has changed so far. He noted how transportation itself evolved drastically over the last two centuries, and no one really knows how it will look in the next hundred while driving deaths have dropped dramatically—from six per 100 million miles driven to just over one—insurance costs have skyrocketed. He recalled walking into Geico's office in 1950 when the average policy cost was "around 40 bucks a year." Now? It's not unusual to see policies climb into the $2,000+ range—and higher in urban areas. Jain chimed back in with one more important point: autonomous driving might reduce accidents overall, but it doesn't mean insurance will get cheaper. "The number of accidents will drop dramatically because of automatic driving," he said. "But on the other hand, the cost per repair every time there's an accident will go up very significantly because of the amount of technology that's going into the car." So while Geico and others may sell fewer policies for human error, the cost of insuring the tech itself could be just as complex—if not more. Buffett closed the conversation with a philosophical note about change and uncertainty: "You deal with the world as it develops. You never reach an answer in this business—you reach a point of action that you take." Read Next: Maximize saving for your retirement and cut down on taxes: . 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Image: Midjourney UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article Warren Buffett Was Asked If Self-Driving Cars Will Shift Insurance To 'Product Liability' — 'There's No Question… It's Going to Change Dramatically' originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Forbes
10-05-2025
- Business
- Forbes
Takeaways From Berkshire Hathaway's First Quarter 2025 Earnings
If you told me that I had to invest $50 billion every year until we got down to $50 billion in cash, that would be the dumbest thing in the world. Things get extraordinarily attractive very occasionally. – Warren Buffett Berkshire Hathaway's (BRK/A, BRK/B) first-quarter earnings release was eclipsed by the annual meeting and the announcement that Warren Buffett would be stepping down as CEO at the end of the year. Warren Buffett leads Berkshire as CEO and Chairman with Greg Abel, Vice Chairman of Non-insurance, and Ajit Jain, Vice Chairman of Insurance. Berkshire Hathaway reported earnings of almost $4.6 billion in the first quarter, well below the $12.7 billion in the same quarter of 2024, primarily due to a decline in stocks. Operating earnings, which remove the distortion from market changes and better reflect the firm's earnings power, fell by 14% for the quarter versus 2024. Per-share operating income decreased by 14% for the quarter, with no share repurchases over the past year. Berkshire Hathaway 1Q 2025 Earnings Glenview Trust, Berkshire Hathaway Filings Berkshire's most significant business by annual operating earnings is insurance, followed by the manufacturing, service, and retailing segment. Berkshire Hathaway: 1Q 2025 Operating Earnings Glenview Trust, Berkshire Hathaway Filings Buffett spoke briefly at the annual meeting about first-quarter earnings. He noted that Berkshire's insurance earnings were as good as they get in 2024, so starting less well this year is unsurprising. Insurance underwriting was the primary culprit behind the decline in operating earnings, with wildfire losses negatively impacting results. Other income also declined significantly, primarily due to accounting for foreign currency swings. Excluding insurance and the 'other' segment, operating earnings were 9% higher. 1Q 2025 Operating Earnings By Segment Glenview Trust, Berkshire Hathaway Filings For the first quarter of 2025, investment income was 11% higher than in 2024, primarily due to higher short-term investment balances. There was wonderful news at the annual meeting that GEICO has closed the technology gap with competitors. Jain credited Todd Combs with turning around the business and stated that the company is no longer behind in telematics. GEICO also saw a significant workforce decline, which aided in profitability. Notably, policies in force grew relative to the first quarter of 2024. The two most essential concepts in insurance investing are 'float' and underwriting profit. In simple terms, float is created for insurance companies because insurance premiums are paid before any claims are made by the insured. Insurance companies can invest the float, sometimes for years, before insurance losses are reimbursed. Berkshire's float at $173 billion is $2 billion higher than on December 31, 2024. In general, the value of float increases as yields rise since an insurance company can earn more when investing the cash. Float per share was $120,287, above the level at the end of 2024. Share repurchases were not an aid to the growth of float per share over the past year. Float Glenview Trust, Berkshire Hathaway Filings, Bloomberg Significant catastrophe losses from the California wildfires hit Berkshire for the quarter. Despite these losses, Berkshire's insurance segment earned an underwriting profit. The comparison versus the first quarter of 2024 was difficult, since there were no large losses during that period. Berkshire has a history, unlike many insurance companies, of earning an underwriting profit, meaning that their float costs it nothing and makes it money in addition to allowing it to earn a profit off of investing the float. Berkshire has three main insurance businesses: GEICO, Berkshire Hathaway Primary Group, and Berkshire Hathaway Reinsurance Group. Due to the wildfires, only GEICO had a profitable underwriting quarter. An underwriting profit means the insurance premium exceeds all insurance claims and expenses. For example, GEICO had a combined ratio of 79.8% in the first quarter, which means that only 79.8 cents of every dollar in insurance premiums were spent on losses and expenses. A combined ratio over 100% indicates the insurance company has an underwriting loss, as seen with the Berkshire Hathaway Primary Group in the quarter. Insurance Combined Ratios Glenview Trust, Berkshire Hathaway Filings, Bloomberg Berkshire owns one of the largest railroads in North America, the Burlington Northern Santa Fe (BNSF) railroad, which operates in the U.S. and Canada. Railroad freight volume improved, and operating earnings rose about 6% versus the same quarter last year. On a more positive note, BNSF continued to see better productivity, which bodes well for earnings improvement outside of extraordinary items. BNSF's trailing 12-month operating ratio, operating expenses divided by revenue, improved in the first quarter. Buffett noted at the annual meeting that the 'railroad is not earning what it should,' but is 'getting solved.' BNSF Operating Ratio - Trailing 12 Months Glenview Trust, Berkshire Hathaway Filings, Bloomberg BHE generally provides steady and growing earnings, as one would expect from what primarily consists of regulated utilities and pipeline companies. In addition, BHE typically produces significant tax credits due to its renewable electricity generation. For this reason, Berkshire focuses on after-tax earnings, which is 'how the energy businesses are managed and evaluated.' BHE had a strong year on the headline numbers, with operating earnings soaring by 53% over the same quarter in 2024. However, lower losses for the real estate segment (Homeservices) flattered the year-over-year comparisons. In the first quarter of 2024, BHE's real estate group lost $159 million as it set aside reserves for losses from 'real estate industry litigation matters.' Pre-tax earnings fell by 1.3% due primarily to the manufacturing businesses. This segment consists of many diverse companies, so this analysis will focus on the best and worst performers and some themes when looking at this segment. Within the manufacturing segment, the building and consumer products groups accounted for the decline in pre-tax income. Within building products, Clayton Homes had better revenues, but lower pretax income due to 'lower earnings from financial services.' MiTek and Shaw had falling earnings 'due to falling demand and the impact of a divestiture in 2025.' The decline in consumer products earnings was primarily from Forest River, with additional weakness from Garan, Jazwares, and Duracell. The service group saw a 9.6% increase in pre-tax earnings for the quarter, primarily attributable to the aviation services, leasing businesses, and Charter Brokerage. Lower earnings from TTI partially offset the strength in those businesses. TTI is a distributor of electronic components, and management began noting weakness in the group in 2023 due to inventory levels and sagging demand. It is not abnormal for distribution businesses to suffer from these issues after a period of supply chain issues and high demand, as seen surrounding COVID. The retailing group was a drag on earnings growth, with a 7.6% decline in pre-tax earnings for the quarter. The most critical portion of the retailing segment is Berkshire Hathaway Automotive (BHA), which owns over 80 auto dealerships. BHA had flat earnings compared to the first quarter of 2024. Pre-tax earnings for the remainder of the retailing group fell by 32.8%, due primarily to 'lower earnings from our other retailing businesses, partially offset by increased earnings from the home furnishings businesses.' Pilot Travel Centers (PTC) is the largest operator of travel centers in North America, under the names Pilot and Flying J. On January 16, 2024, Berkshire acquired the final 20% and now owns 100% of the entity. Despite decreased revenues in the quarter, pre-tax earnings increased 140% due to 'gains from asset dispositions and lower interest expense, partially offset by higher selling, general and administrative expenses.' McLane's revenues also declined relative to the same quarter in 2024. Still, pre-tax earnings were 9.7% higher thanks to 'an increase in the overall gross sales margin rate, partially offset by the impacts of lower sales and higher selling, general and administrative expenses.' This segment includes companies' profits that must be accounted for under the equity method due to the size of ownership and influence on management. The after-tax equity method earnings have Berkshire's proportionate share of profits attributable to its investments in Kraft Heinz (KHC), Occidental Petroleum (OXY), and Berkadia. According to Bloomberg, Berkshire is Occidental Petroleum's largest shareholder, with an almost 27% stake. More about the reasons for the Occidental investment is here. The segment experienced a 96% decline in operating earnings for the quarter, primarily due to foreign currency exchange rate losses generated from bonds issued by Berkshire Hathaway and denominated in British Pounds, euros, and Japanese Yen. These foreign currency swings are not a concern as Berkshire has significant assets and earnings denominated in these foreign currencies. Investment gains from non-U.S. dollar investments generally offset some of these losses and vice versa, depending on currency exchange rates. Acquisition accounting expenses are also reflected in this segment. These expenses are created by amortizing intangible assets connected to companies purchased by Berkshire. Finally, the gain in other earnings includes ' Berkshire parent company investment income, corporate expenses, intercompany interest income on loans to operating subsidiaries when the related interest expense is included in earnings of the operating subsidiaries and unallocated income taxes.' Investment Portfolio: $496.5 Billion Glenview Trust, Berkshire Hathaway Filings, Bloomberg Berkshire was a net seller of $1.5 billion in publicly traded stocks in the first quarter. This marks the tenth straight quarter of Berkshire Hathaway's net sales of stocks. Berkshire bought $3.2 billion of stocks while selling $4.7 billion. The upcoming 13F filing with the SEC will provide more specific buy and sell details. After the sales, Berkshire's insurance company investment portfolio is down to 52% publicly traded stocks from 53% in the fourth quarter, while cash rose from 43% to 44%. The BNSF railroad had slipped relative to the five other major railroads, but there has been some improvement in profitability and efficiency in 2024. There wasn't much of an update at the annual meeting other than Buffett saying that the 'railroad is not earning what it should,' but is 'getting solved.' In any case, BNSF continues to be on their radar, so progress should be monitored. While BHE earnings looked much better to start 2025, the threat of further liability for wildfires hasn't gone away. Buffett and Abel spoke at length about the need for more electric generating capacity, but that the liability threat imperils the attractiveness of Berkshire's future capital spending in the business. Buffett went so far as to say that 'our enthusiasm for buying public utilities is different than it was.' Pre-Tax Margin By Operating Segment Glenview Trust, Berkshire Hathaway Filings, Bloomberg Summary And Scorecard Berkshire's stock price outperformed the S&P 500 in the first quarter, rising by 17.3% versus a total return of -4.3% from the S&P 500. Year-to-date through May 9, Berkshire's price was +13.2%, while the S&P 500 had a total return of -3.3%. Short-term results are generally not meaningful for Berkshire since it is managed with a focus on increasing long-term value and not meeting quarterly hurdles. This ability to take advantage of time arbitrage has served the company and shareholders well over the years. The goal in looking at the results is to see if the segments are generally operating as expected and to consider Warren Buffett's capital allocation decisions05. Previously, Buffett provided a handy blueprint for the goals of Berkshire's management. The first goal would be to 'increase operating earnings.' Secondly, success in the 'decrease shares outstanding' goal would boost operating earnings per share faster. Lastly, 'hope for an occasional big opportunity,' allowing for a sizable cash investment at an attractive expected return. This analysis will use Buffett's blueprint as a lens through which to evaluate how Berkshire is performing. Increase operating earnings: Trailing 12-month operating earnings were 13.1% higher than last year's same quarter, though underwriting losses caused a 3.3% sequential decline in the measure. Buffett says that operating earnings are the 'most descriptive' way to view Berkshire since they remove the short-term volatility of market fluctuations in net earnings. Trailing 12 Month Operating Earnings Glenview Trust, Berkshire Hathaway Filings, Bloomberg Decrease shares outstanding: Particularly since 2018, a significant capital allocation decision has been made to increase share repurchases. When Berkshire Hathaway actively repurchases shares, it signals when Buffett believes its share price is below his intrinsic value estimate. If he is correct, the purchases are a value-creator for the remaining shareholders. Berkshire has stated that there would be no stock repurchases if it would cause cash levels to fall below $30 billion, so the firm's safety will not be compromised. Berkshire has not repurchased stock for the last four quarters. Share Repurchases Glenview Trust, Berkshire Hathaway Filings, Bloomberg Until an announcement in mid-2018, Berkshire had only made repurchases when the stock traded at less than 1.2 times the price-to-book (P/B) ratio. While that constraint is now relaxed, it is still a good indicator of the general range when aggressive repurchases will likely be seen. Berkshire's price-to-book ratio remained elevated during the quarter, so share repurchases were suspended. Berkshire only intends to repurchase shares when the 'repurchase price is below Berkshire's intrinsic value, conservatively determined.' The price-to-book ratio remains a reasonable proxy for gauging Berkshire's intrinsic value. Still, Warren Buffett's judgment about its intrinsic value versus other available uses of capital can differ from that simple price-to-book measure. Price-To-Book Ratio Glenview Trust, Bloomberg A longer-term view of the positive impact of Berkshire's share repurchases is illuminating. Since the start of more aggressive share repurchases in 2018, Berkshire's operating earnings have grown at a 17.3% compound growth rate, while operating earnings per share have done 2.2 percentage points better at 19.5%. Eagle-eyed readers might notice that operating earnings growth oddly exceeded operating earnings per share growth over the last year. Berkshire issues some shares to purchase the remainder of Berkshire Hathaway Energy (BHE) in October 2024. Annualized Growth Rates Glenview Trust, Bloomberg Hope for an occasional big opportunity: Berkshire has a fortress balance sheet with cash and equivalents of over $342 billion. Cash as a percentage of Berkshire Hathaway's size is the highest since we have data, at 29.9%. This cash hoard provides flexibility to take advantage of opportunities, including repurchasing its stock if the price declines to attractive levels. Buffett said Berkshire 'holds a lot more cash and Treasury bills than I would like.' He is always looking for investments, but 'things don't come along in an orderly fashion.' He'd like less cash on hand, even as low as $50 billion. 'Occasionally, we will be bombarded with opportunities that we will be happy we have the money for,' he said. Share repurchases are off the table at the current valuation, so one lever for Buffett to create value is removed. Despite Berkshire shares being too dear relative to Buffett's estimate of intrinsic value for share repurchases, shareholders should take comfort in knowing that the firm continues to be managed to survive and emerge stronger from any tariff shocks, recession, or market downturn by being in a financial position to take advantage of opportunities during a crisis. Cash As A Percent Of Total Assets Glenview Trust, Bloomberg Buffett made the most significant announcement at the end of the meeting, stating that he planned to step down from the CEO role at the end of the year. He recommended that Greg Abel assume the CEO role and that Abel should have the 'final word on operations or capital deployment.' Following the meeting, the board of directors approved the succession plan, with Buffett remaining Chairman. While it was already clear that Abel was making most of the operational decisions, assuming the final responsibility for all capital allocation decisions will be a significant change. Notably, Buffett will remain Chairman to provide any needed guidance and intends to retain all his shares in the company. The scorecard detailed above, which monitors the progress of Berkshire's management, should remain unchanged regardless of the upcoming change in leadership.
Auto Blog
08-05-2025
- Automotive
- Auto Blog
Auto Insurance Industry Faces Up to the Self-Driving Car Revolution
The self-driving car revolution is on the brink of transforming auto insurance forever—and Berkshire Hathaway's has begun detailing their response plan. Berkshire Hathaway displays level-headedness toward the development of autonomous cars Conglomerate powerhouse Berkshire Hathaway has revealed their thoughts on the rise of self-driving vehicles and how it expects the tech to impact its most profitable segment of insurance, which its auto insurance subsidiary GEICO primarily drives. In Q1, Berkshire Hathaway's income from insurance underwriting and insurance investment registered at a combined $4.23 billion, or 43.9% of its total operating earnings, The Motley Fool reports. Ajit Jain, Berkshire Hathaway's vice chairman for insurance operations and a key force at GEICO, noted during the company's annual shareholder meeting last week that as driving shifts from human behavior to complex machine processing, insurance needs to shift from compensating drivers to insurance automakers, software developers, and the intricate logistics in these vehicles' code preventing accidents. 0:03 / 0:09 Tesla sales in Europe drop yet again Watch More Waymo/Hyundai IONIQ 5 — Source: Waymo 'There's no question that insurance for automobiles is going to change dramatically once self-driving cars become a reality,' Jain said in an interview with WebProNews. 'Most of the insurance that is sold and bought revolves around operator errors,' while also noting, 'To the extent these new self-driving cars are safer and are involved in fewer accidents, that insurance will be less required. Instead, as you [audience member] mentioned, it'll be substituted by product liability,' Billionaire Warren Buffett adds his two cents Berkshire Hathaway's CEO, Warren Buffett, 94, recently announced he'd be stepping down from his position at the end of 2025. Buffett described his stance on autonomous vehicles and car insurance during Berkshire Hathaway's annual shareholder meeting on Saturday by saying, 'You deal with the world as it develops.' The billionaire also noted that he doesn't think that self-driving vehicles will undermine Berkshire Hathaway's insurance profits by highlighting how the annual GEICO policy was around $40 annually when he started working at the company during the early 1950s and that now, it's not unusual for a policy to be around $2,000, even though driving has gotten safer. 'During that same time [1950s], the number of people killed in auto accidents has fallen from roughly six per 100 million miles driven to a little over one. So the cars become incredibly safer, and it costs 50 times as much now, or thereabouts, to buy an insurance policy,' Buffett said, according to WebProNews. Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. Jain believes that vehicle accidents will decline as self-driving cars evolve, but expects the cost of repairing the newest multi-sensor, computer-filled autonomous fleets to climb. The Berkshire Hathaway executive also predicted that the auto insurance industry's pivot toward product-liability policies will be the field's largest-ever transformation. Final thoughts The self-driving car revolution is underway, and a subsequent seismic shift within the auto insurance industry may happen sooner than expected. Waymo, considered the world's leading self-driving rideshare fleet, says in a new report that its vehicles are outperforming human benchmarks after 56.7 million miles. The autonomous software company cited its robotaxis as facilitating a 92% reduction in crashes involving injuries among pedestrians, 96% fewer injury-involving intersection crashes, and 85% fewer crashes with suspected serious or worse injuries. Additionally, on April 28, electric automaker XPeng Inc. launched a smart driving insurance service offering additional coverage when its NGP (Navigation Guided Pilot) advanced driver-assist system is operating. NGP offers Level 3 out of Level 5 autonomous capability, meaning it can drive itself under most conditions, but a human must be ready to take over in case of an emergency. Even before self-driving cars take over roads, auto insurance could become more profitable in the near future with an increasing number of autonomous vehicles blending with human-driven automobiles.
Yahoo
03-05-2025
- Business
- Yahoo
Buffett's Insurance Empire Has an AI Plan--And It's Nothing Like Wall Street's
Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) isn't chasing the AI hype trainyet. But when it comes, they'll be ready. Speaking candidly at the shareholder meeting, Vice Chairman Ajit Jain didn't mince words. He called artificial intelligence a real game changer for insurancetransforming how risks are priced, policies sold, and claims processed. Still, true to Berkshire DNA, Jain made it clear they're in no rush to throw money at the trend. We are not very good in terms of being the fastest or the first mover, he said. Our approach is more to wait and see until the opportunity crystallizes. That doesn't mean they're asleep at the wheel. Jain noted Berkshire's insurance units are already experimenting with AI in small waysbut no big checks have been written yet. The reason? Caution. People end up spending enormous amounts of money trying to chase the next new fashionable thing, he warned, hinting at the market's tendency to leap before looking. For Berkshire, the bar is higher: a clear upside, manageable risk, and a long-term edge. But make no mistakewhen the right moment comes, they'll strike. My guess is we will be in a state of readiness, Jain said, and should that opportunity pop up, we'll be in a state where we'll jump in promptly. Translation? They're not betting the farm today. But if the math makes sense tomorrow, Berkshire could become one of AI's most disciplined and decisive players. This article first appeared on GuruFocus.
