BRK-B · Forward model · Insurance — underwriting · Bull case
What has to happen in Insurance — underwriting
Model as of
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Insurance — underwriting
Premiums earned by GEICO, Berkshire Hathaway Primary Group and Berkshire Hathaway Reinsurance Group against losses, life and health benefits and underwriting expenses. $22,475M of segment revenue and $2,180M of pre-tax earnings in the basis quarter. This line is the COST OF FLOAT: the $177.5 billion of insurance liabilities it generates funds part of the investment portfolio carried in netCash, and because underwriting is profitable that cost is currently negative. It stays in the model even though the assets it funds are added at market rather than capitalised — if underwriting ever turns loss-making the model charges the loss and the float treatment self-corrects.
Latest: $26.29B (2031Q2E)
| Period | Value |
|---|---|
| 2022Q1 | $17.49B |
| 2022Q2 | $18.08B |
| 2022Q3 | $18.75B |
| 2022Q4 | $20.25B |
| 2023Q1 | $19.80B |
| 2023Q2 | $20.56B |
| 2023Q3 | $21.36B |
| 2023Q4 | $21.69B |
| 2024Q1 | $21.47B |
| 2024Q2 | $21.95B |
| 2024Q3 | $22.05B |
| 2024Q4 | $22.77B |
| 2025Q1 | $21.80B |
| 2025Q2 | $22.20B |
| 2025Q3 | $22.45B |
| 2025Q4 | $22.46B |
| 2026Q1 | $22.00B |
| 2026Q2 | $22.48B |
| 2026Q3E | $22.61B |
| 2026Q4E | $22.75B |
| 2027Q1E | $22.91B |
| 2027Q2E | $23.07B |
| 2027Q3E | $23.23B |
| 2027Q4E | $23.40B |
| 2028Q1E | $23.58B |
| 2028Q2E | $23.77B |
| 2028Q3E | $23.96B |
| 2028Q4E | $24.15B |
| 2029Q1E | $24.35B |
| 2029Q2E | $24.55B |
| 2029Q3E | $24.75B |
| 2029Q4E | $24.96B |
| 2030Q1E | $25.18B |
| 2030Q2E | $25.39B |
| 2030Q3E | $25.61B |
| 2030Q4E | $25.83B |
| 2031Q1E | $26.06B |
| 2031Q2E | $26.29B |
Assumptions & reasoning
- 9.70% is the basis quarter's own pre-tax margin, $2,180M on $22,475M. Terminal 10.80% is the trailing-twelve-month margin, $9,649M on $89,383M, which is the through-cycle figure: the quarterly series runs from 4.69% in 2024 Q3 to 18.43% in 2024 Q4 purely on catastrophe timing and prior-year reserve releases, and no single quarter is a run rate.
- The basis quarter is a BENIGN one and the filing says so twice. There was no significant catastrophe event — none over $150M — in the first six months of 2026, against $1.1 billion of Southern California wildfire losses in 1H 2025, and underwriting earnings still fell 13.1%. GEICO's loss ratio rose 4.8 points to 76.6% and its underwriting expense ratio rose 2.9 points to 14.6%, while $1.5 billion of favourable prior-accident-year development was taken in the half.
- Berkshire publishes GEICO, BH Primary and BHRG separately inside this segment and the model deliberately does NOT split them. Underwriting is one economic line with one driver; three verticals would triple the count and add no information the engine could use.
- Segment earnings before income taxes are struck after this segment's OWN interest expense. The seven segments' interest lines sum to $1,437M in the basis quarter against $1,335M of CONSOLIDATED interest expense, so every dollar of Berkshire's interest cost is already charged inside a vertical margin. That is why no debt is netted in spec.netCash: subtracting the $128,599M of borrowings as well would take the same cost twice.
- Berkshire files no fourth-quarter report. Every Q4 point here is the annual figure less the nine-month figure from that year's third-quarter 10-Q and is flagged estimated for that reason; Q1, Q2 and Q3 are read directly from the filed segment notes and are not.