Berkshire Hathaway’s CEO Greg Abel reported a decline in underwriting and investment income for the company’s insurance and reinsurance operations in his first annual report to investors. The results reflect a shift from two years of rising underwriting profits, with all sectors—personal lines, commercial lines, and reinsurance—showing shrinking underwriting income and higher combined ratios. Abel’s letter to shareholders highlighted the challenges facing the conglomerate’s property/casualty units, which remained profitable but faced ongoing pressures. GEICO, the largest insurer within the group, accounted for over 50% of the $1.9 billion year-over-year drop in pretax underwriting profits. Across all property/casualty operations, pretax underwriting profits fell 16.5% to $9.7 billion. Abel warned that slowing growth is likely to persist into 2026, citing the impact of GEICO’s broad rate increases, which restored margins but reduced customer retention. Competitors’ rate reductions could further strain the sector. Abel emphasized the need for the GEICO team to balance pricing risks for existing and new customers while maintaining underwriting discipline. In commercial insurance, demand remained strong in 2025, but pricing pressures emerged as more capital entered the market. Abel noted that while the company prioritized underwriting discipline over volume, premium growth plateaued as pricing became less attractive. He warned that primary insurance businesses would face continued headwinds in 2026 and beyond. Reinsurance operations also faced challenges, with significant capital inflows from traditional and alternative markets driving price drops. While reinsured catastrophe losses were less severe in 2025, claims inflation outpaced pricing in casualty reinsurance segments, leading to reduced premium writing.#berkshire_hathaway #state_farm #geico #greg_abel #progressive
State Farm Announces $5 Billion Dividend, $100 Average Refund for Car Insurance Customers State Farm revealed on Thursday that it will distribute a record $5 billion in dividends to its car insurance members, marking the largest payout in the mutual insurance company’s 103-year history. The company attributed the decision to its strong financial position and improved underwriting performance, which it claims has been observed across the industry. Customers can anticipate receiving an average refund of $100, though the exact amount will vary by state and depend on the level of premiums paid. In addition to the dividend, State Farm reported a 10% reduction in premiums across 40 states, resulting in $4.6 billion in cost savings for policyholders. This trend reflects broader shifts in the auto insurance sector, where declining auto repair costs and a drop in accident frequency in 2025 have contributed to industry-wide improvements. However, despite these positive developments, car insurance premiums have surged, with rates rising over 50% in three years by early 2025. This marks the highest inflation rate for motor vehicle insurance in five decades, according to the Bureau of Labor Statistics. Affordability has become a major concern for consumers, prompting many to actively seek better deals. A recent TransUnion report highlighted that insurance shopping has evolved into a regular activity for consumers, rather than an occasional action tied to car or home purchases. Patrick Foy, senior director of strategic planning for TransUnion’s insurance business, told CNBC that “regular insurance shopping is just the new normal.” The report linked this behavior to economic pressures driving households to cut expenses, while insurers increasingly invest in marketing and competitive pricing strategies.#berkshire_hathaway #state_farm #travelers #transunion #geico
