Berkshire Hathaway sells insurance (like GEICO auto policies), collects premiums upfront, and instead of just sitting on the money it hasn't yet paid out in claims, invests that 'float' in stocks like Apple and buys entire companies outright — railroads, utilities, manufacturers.
How Berkshire makes money
Berkshire's insurance subsidiaries — GEICO, General Re, and others — collect premiums from policyholders upfront, long before most claims come due. That pool of collected-but-not-yet-paid-out money is called "float," and rather than letting it sit idle, Berkshire's headquarters deploys it: into public stocks (Apple among them) and into buying entire companies outright, from a railroad (BNSF) to utilities to manufacturers. Buffett has long described this as "investing with other people's money" — as long as the insurance operations themselves don't lose money underwriting, the float is effectively a free source of investment capital.
Float: premiums collected but not yet paid out as claims, available to invest — about $176B at year-end 2025. Source: 10-K FY2025, Item 7 MD&A, insurance investment income section.
Where the revenue comes from
| Segment | Revenue | Share |
|---|---|---|
| Insurance | $104,212M | 28.1% |
| Manufacturing | $78,487M | 21.1% |
| Service and retailing | $42,647M | 11.5% |
| Energy (Berkshire Hathaway Energy) | $26,297M | 7.1% |
| Railroad (BNSF) | $23,533M | 6.3% |
The remainder is non-operating (investment gains/losses, equity-method income). Source: 10-K FY2025, Item 8, Note 26, Segment Information.
Geographic revenue isn't disclosed company-wide — only the insurance segment's premiums are broken out: 86.2% from the U.S., 13.8% international. With most revenue tied to the U.S., overall currency risk is relatively limited, though reinsurance (Berkshire Hathaway Reinsurance Group) is exposed to catastrophes worldwide.
Source: 10-K FY2025, Item 8, Note 26.
Customers and competitors
Customers span individual consumers (GEICO auto-insurance policyholders, retail customers of subsidiaries) and businesses (BNSF freight customers, other insurers ceding risk through reinsurance). No single customer accounts for 10% or more of consolidated revenue — even McLane's largest retail customers are small relative to total company revenue.
- State Farm — the largest U.S. auto insurer, competing through an agent-based model that contrasts with GEICO's direct-to-consumer channel.
- Progressive — the most aggressive on data-driven pricing, and has recently been taking market share from GEICO.
- Allstate — a mixed agent/direct model with strong brand recognition, though it trails GEICO on loss-ratio management.
Source: 10-K FY2025, Item 1 Business (GEICO competitors named directly; reinsurance-segment competitors aren't individually named in the filing).
The metric that matters most in this sector
Two numbers show whether the insurance-float engine is actually working: how much float there is to invest, and whether the underlying insurance business is profitable on its own (a "combined ratio" below 100% means an underwriting profit — the float effectively costs less than nothing to hold).
| 2021 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|
| Insurance float | $147B | — | — | $176B |
| Combined ratio | — | 91.7% | 87.1% | 89.4% |
Float has grown every year, up 20% over five years to $176B, and the combined ratio has stayed below 100% for three straight years shown — meaning Berkshire's insurance operations have been consistently profitable to underwrite, on top of generating investable float.
Source: 10-K FY2025/FY2022, Item 7 MD&A (float); 10-K FY2025, Item 7 MD&A and Item 8 Note 26 (combined ratio, GEICO and BH Primary loss data).
Leadership and ownership
Greg Abel (63) became CEO effective January 1, 2026 — he ran Berkshire Hathaway Energy from 2008 to 2018, then served as Vice Chairman of Non-Insurance Operations. Warren Buffett (95) stepped down as CEO and remains Chairman of the board. Combined voting power held by directors and executives is 30.4% (Buffett individually holds 30.2%) — Berkshire remains an overwhelmingly controlling-shareholder structure even through the CEO transition.
Source: DEF 14A (filed Mar 13, 2026), director nominee bios and ownership table.
Capital returns
Berkshire pays no dividend — none since 1967 — reflecting Buffett's long-held view that he can compound shareholders' capital better by reinvesting it than they could on their own. Share buybacks tell a different story: $9.17B (FY2023), $2.92B (FY2024), and exactly $0 in FY2025 — Berkshire didn't repurchase a single share last year, and the outstanding share count actually ticked up slightly as a result.
Source: 10-K FY2025, Item 5 and Item 8 (statement of changes in equity, cash flow statement).
How this company could fail
- Key-person and succession risk — 2026 is the first full year of the Buffett-to-Abel transition, and the new CEO's capital-allocation record hasn't yet been proven over a long track record.
- Stock-portfolio concentration — the top five holdings made up 65% of the equity portfolio's market value at year-end 2025; a sharp drop in a handful of names would shake consolidated earnings directly.
- Concentrated catastrophe exposure — Berkshire deliberately takes on up to $15 billion in pretax loss from a single catastrophic event, and unpaid loss reserves total $151.8 billion, so even small errors in reserve estimates move reported earnings meaningfully.
Source: 10-K FY2025, Item 1A Risk Factors.
Five-year financials
| Metric | FY2025 | YoY | 5-year change |
|---|---|---|---|
| Revenue | $371.4B | +0.0% | Jumped in 2023 (Alleghany acquisition), roughly flat since |
| Core operating earnings (ex-investment gains) | $42.9B | -3.7% | +56% |
| Free cash flow | $25.0B | +115.6% | Volatile — fell to $11.6B in FY2024 on heavier capex before rebounding |
| Total debt | $129.1B | +3.5% | Cash + short-term Treasuries of $369B is 2.9x total debt |
Source: 10-K FY2025 and FY2022, Item 8 financial statements.
What we still don't know
- How much Abel's investment style will actually differ from Buffett's over the long run can't be judged from this data — the August 2026 13F showed a large increase in Berkshire's Alphabet stake, an early signal, but one data point isn't a pattern yet.
- Why buybacks stopped completely in 2025 isn't explained in the 10-K — whether valuation felt too rich or capital was held back for other uses would need annual-meeting Q&A, since Berkshire holds no earnings calls.
- The reinsurance (BHRG) segment's standalone combined ratio isn't separately disclosed — only GEICO and BH Primary loss ratios are broken out, even though reinsurance carries the largest single-event catastrophe exposure.
Frequently asked questions
How does Berkshire Hathaway make money?
Berkshire sells insurance, collects premiums upfront, and invests the 'float' — money collected but not yet paid out in claims — in stocks and by buying entire companies outright, including railroads, utilities, and manufacturers.
Does Berkshire Hathaway pay a dividend?
No — Berkshire hasn't paid a cash dividend since 1967. Warren Buffett's long-standing position is that he can compound shareholders' money more effectively by reinvesting it than they could themselves.
What is Berkshire Hathaway's market cap?
As of this article's data, Berkshire's market cap was about $1.07 trillion, on FY2025 revenue of $371.4B.