Insurance Underwriting and Investment Income Decline; Float Rises to $176 Billion
Berkshire Hathaway Inc. reported net earnings attributable to shareholders of $19.2 billion for the fourth quarter of 2025, compared to $19.7 billion in the fourth quarter of 2024. For the full year, net earnings declined to $66.97 billion from $88.99 billion in 2024.
Operating earnings were $10.2 billion in the fourth quarter, down from $14.53 billion a year earlier. For the full year, operating earnings were $44.49 billion, compared to $47.44 billion in 2024.
Insurance underwriting generated $1.56 billion in operating earnings in the fourth quarter of 2025, compared to $3.41 billion in the fourth quarter of 2024. For the full year, underwriting earnings totaled $7.26 billion, down from $9.02 billion in 2024.
Insurance investment income was $3.07 billion in the fourth quarter, compared to $4.09 billion in the prior-year quarter. For the full year, insurance investment income declined to $12.51 billion from $13.67 billion in 2024.
At December 31, 2025, insurance float was approximately $176 billion, up from $171 billion at year-end 2024 and from $88 billion at year-end 2015.
Combined Ratio Improves to 87.1%
In his first annual letter as chief executive officer, Greg Abel wrote that in 2025 Berkshire’s insurance operations “accomplished their fundamental goals: grow underwriting profits and float in a disciplined manner.”
Berkshire produced a combined ratio of 87.1% across its property and casualty businesses in 2025, compared with a five-year average of 90.7%, ten-year average of 93.0% and twenty-year average of 92.2%. The retroactive reinsurance business, which does not receive regular premiums, was excluded from those figures.
Abel noted that after several years of pricing and policy term adjustments, “in 2025 [the industry] began to experience a deceleration or reversal of these trends, particularly in the latter half of the year. This likely means we will write less property and casualty business for a period of time.”
He also cited catastrophe activity, writing that although the year began with “significant wildfire-related losses in Los Angeles,” the Atlantic hurricane season was “unusually benign,” with no hurricane making landfall in the United States for the first time in a decade.
GEICO and Market Conditions
GEICO was described as “a significant contributor to the group’s lower combined ratio.” Abel said GEICO has improved its cost structure, strengthened underwriting discipline and enhanced risk segmentation and pricing.
Industrywide rate increases from late 2022 through 2024 “continued to positively impact performance in 2025.” However, broad rate increases “come at the cost of lower retention,” and competitors’ rate reductions “may extend that pressure into 2026.” He wrote that restoring retention “while maintaining underwriting discipline will take time.”
Across Berkshire’s other primary commercial lines, pricing was described as adequate or improving early in the year, but additional capital entering the market led to lower pricing or decelerating rate increases in several lines. As pricing became less attractive, premium growth plateaued. Abel said the company expects primary insurance businesses to face continued headwinds in 2026 and potentially beyond.
In reinsurance, increased capital from traditional and alternative markets and a more benign catastrophe year led to “significant price declines in property reinsurance.” In casualty reinsurance, claims inflation continued to outpace pricing. “As long as these phases of the cycle endure, we expect to write less reinsurance premium,” he wrote.
Capital Strength and Dividends
Abel highlighted Berkshire’s structural strengths, including significant capital, managerial autonomy, underwriting discipline and a long-term focus.
Insurance subsidiaries were permitted to pay up to $31 billion in ordinary dividends to the parent in 2025 without prior regulatory approval. They returned $29 billion during the year.
Investment Volatility and Impairments
Net earnings included investment gains of $13.49 billion in the fourth quarter of 2025 and $30.74 billion for the full year, compared to $5.17 billion and $41.56 billion, respectively, in 2024.
Results also included other-than-temporary impairment charges of $4.50 billion in the fourth quarter and $8.26 billion for the full year related to investments in Kraft Heinz and Occidental.
The company reiterated that GAAP requires changes in unrealized gains and losses on equity securities to be included in earnings, and that the amount of investment gains or losses in any given quarter “is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules.”
