New CEO of GEICO parent company says it will write less P&C business
In his first letter to shareholders, Berkshire Hathaway CEO Greg Abel wrote the company will likely write less property and casualty business “for a period of time.”
“We own an extraordinary group of insurance businesses, each managed with a long-term orientation,” the letter states. “Their performance reflected both their inherent strengths and an industry that, after several years of needed adjustments to pricing and policy terms, in 2025 began to experience a deceleration or reversal of these trends, particularly in the latter half of the year.”
Abel took over from Warren Buffett as CEO of Berkshire Hathaway in January 2026 and has now delivered his first letter to shareholders alongside the company’s results for the 2025 financial year.
Specific to auto insurance, Abel wrote that over the past few years, “GEICO has improved its cost structure, strengthened its underwriting discipline, and enhanced its ability to segment customers and the related pricing of risk.”
“Industrywide rate increases from the end of 2022 through 2024 continued to positively impact performance in 2025,” he wrote. “While these increases varied by product and jurisdiction, the pricing environment remained firm, and GEICO benefited accordingly.
“Alongside retaining its customer base with a more nuanced pricing strategy, GEICO is investing in technology to improve efficiency and service, while preserving its position as the industry’s low-cost provider.”
Reinsurance News reports that Berkshire’s P&C combined ratio weakened slightly in 2025 to 84.5%, compared with 82.9% in 2024, driven by a higher loss ratio of 57.2% and a slightly lower expense ratio of 27.3%.
It also states that GEICO was again the main driver of insurance underwriting profit last year.
“GEICO generated pre-tax underwriting earnings of $6.8 billion in 2025 compared with $7.8 billion in 2024, as premiums written increased by more than 5% to $45.2 billion, driven by an increase in policies-in-force over the past year, and premiums earned increased by over 5% to $44.5 billion,” the article states.
“Losses and LAE at GEICO rose by 6% year-on-year to $32.1 billion, as underwriting expenses increased by 34.2% to $5.5 billion. A higher loss ratio of 72.3% and a higher expense ratio of 12.4% resulted in a combined ratio of 84.7% for GEICO in 2025, higher than 2024’s 81.5%.”
CNBC noted in its March 1 Warren Buffett Watch newsletter that Berkshire’s overall cash decreased 2.2% in Q4 to $373.3 billion as of Dec. 31.
Operating earnings fell 29.8% to $10.2 billion during the quarter, compared to Q4 2024 to $10.2 billion, according to CNBC. It adds that the company’s insurance underwriting was down 54%, and insurance investment income fell 25%.
“One of the few analysts who covers Berkshire Hathaway is out with a detailed report on the company that includes a prediction its stock will rise by 10% to 12% each year over the next decade,” the article states.
On Monday, GEICO announced that it will further reduce auto insurance rates for Florida drivers, citing continued stabilization in the state’s insurance market following legal system reforms enacted in 2023.
“As Florida’s second-largest auto insurer, we’re encouraged by the positive changes in the insurance market following recent legal system reforms,” said Amanda White, GEICO’s head of insurance product management, in a press release. “Those steps have helped create a more stable market, allowing us to better serve our growing customer base with competitively priced insurance products.”
In October, Florida Gov. Ron DeSantis said that insurance reform in the state over the past couple of years has played a part in the top five auto insurance groups reducing rates, on average, by 6.5% in 2025.
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