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Can Float Fuel Berkshire's Long-Term Growth and Value Creation?
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Key Takeaways
BRK.B's float has grown from $114B in 2017 to $173B in Q1 2025, boosting low-cost capital supply.
Berkshire uses float to fund high-return investments like Apple, BNSF Railway, and utilities.
EPS estimates for Q2 and Q3 2025 fell, but 2026 full-year EPS and revenue projections have increased.
Berkshire Hathaway Inc. (BRK.B - Free Report) is a diversified conglomerate that is one of the largest property and casualty insurers globally. Continued insurance business growth fuels an increase in float, the pool of insurance premiums held before claims are paid, which is one of the low-cost capital sources for the company. On a consolidated basis, float has grown from approximately $114 billion at the end of 2017 to $173 billion at the end of the first quarter of 2025.
Berkshire insurance businesses represent about one-quarter of Berkshire’s total revenues, including GEICO (auto insurance), General Re (reinsurance), and Berkshire Hathaway Reinsurance Group. Berkshire consistently achieves underwriting profitability, meaning it not only grows float but does so while earning a profit. This makes its float both stable and low-cost, enhancing its utility as a long-term funding mechanism. Though recorded as liabilities, float effectively serves as an interest-free source of capital that can be invested elsewhere.
The strategic use of float has powered Berkshire’s long-term growth. With a huge cash hoard, Berkshire Hathaway has deployed the float by acquiring entities that have consistent earning power and generate impressive returns on equity. Its opportunistic investments range from Coca-Cola and Apple to BNSF Railway and utilities.
Far from being just a by-product of its insurance operation, float is a foundational element of Berkshire’s investment strategy and long-term value creation. Given its sturdy insurance operations and supported by disciplined underwriting and Buffett’s capital allocation acumen, float continues to be one of the most powerful engines for compounding value and sustaining a competitive edge.
What About Competitors?
Chubb Limited (CB - Free Report) and The Travelers Companies (TRV - Free Report) are two other notable companies in the insurance space.
Chubb Limited’s disciplined approach to capital deployment emphasizes strong underwriting, prudent reserve practices, and selective acquisitions to broaden its global presence and enhance specialty capabilities. Chubb also prioritizes long-term value creation through consistent shareholder returns via dividends and buybacks, while investing in technology and risk management to drive sustainable growth.
The Travelers Companies deploys capital prudently by focusing on disciplined underwriting, accurate risk assessment, and data-informed pricing, ensuring stable profitability and financial resilience. Travelers drives long-term value through continued investments in technology and analytics, while consistently returning excess capital to shareholders via dividends and share buybacks.
BRK.B’s Price Performance
Shares of BRK.B have gained 7.6% year to date, outperforming the industry.
Image Source: Zacks Investment Research
BRK.B’s Expensive Valuation
BRK.B trades at a price-to-book value ratio of 1.59, above the industry average of 1.55. It carries a Value Score of D.
Image Source: Zacks Investment Research
Estimates Movement for BRK.B
The Zacks Consensus Estimate for BRK.B’s second-quarter and third-quarter 2025 EPS has moved down 3% and 0.3%, respectively, over the past 30 days. The consensus estimate for full-year 2025 has increased 0.2% and the same for 2026 has moved 2.7% higher.
Image Source: Zacks Investment Research
The consensus estimates for BRK.B’s 2025 and 2026 revenues indicate a year-over-year increase. While the consensus estimate for BRK.B’s 2025 EPS indicates a decline, the same for 2026 suggests an increase.
Image: Bigstock
Can Float Fuel Berkshire's Long-Term Growth and Value Creation?
Key Takeaways
Berkshire Hathaway Inc. (BRK.B - Free Report) is a diversified conglomerate that is one of the largest property and casualty insurers globally. Continued insurance business growth fuels an increase in float, the pool of insurance premiums held before claims are paid, which is one of the low-cost capital sources for the company. On a consolidated basis, float has grown from approximately $114 billion at the end of 2017 to $173 billion at the end of the first quarter of 2025.
Berkshire insurance businesses represent about one-quarter of Berkshire’s total revenues, including GEICO (auto insurance), General Re (reinsurance), and Berkshire Hathaway Reinsurance Group. Berkshire consistently achieves underwriting profitability, meaning it not only grows float but does so while earning a profit. This makes its float both stable and low-cost, enhancing its utility as a long-term funding mechanism. Though recorded as liabilities, float effectively serves as an interest-free source of capital that can be invested elsewhere.
The strategic use of float has powered Berkshire’s long-term growth. With a huge cash hoard, Berkshire Hathaway has deployed the float by acquiring entities that have consistent earning power and generate impressive returns on equity. Its opportunistic investments range from Coca-Cola and Apple to BNSF Railway and utilities.
Far from being just a by-product of its insurance operation, float is a foundational element of Berkshire’s investment strategy and long-term value creation. Given its sturdy insurance operations and supported by disciplined underwriting and Buffett’s capital allocation acumen, float continues to be one of the most powerful engines for compounding value and sustaining a competitive edge.
What About Competitors?
Chubb Limited (CB - Free Report) and The Travelers Companies (TRV - Free Report) are two other notable companies in the insurance space.
Chubb Limited’s disciplined approach to capital deployment emphasizes strong underwriting, prudent reserve practices, and selective acquisitions to broaden its global presence and enhance specialty capabilities. Chubb also prioritizes long-term value creation through consistent shareholder returns via dividends and buybacks, while investing in technology and risk management to drive sustainable growth.
The Travelers Companies deploys capital prudently by focusing on disciplined underwriting, accurate risk assessment, and data-informed pricing, ensuring stable profitability and financial resilience. Travelers drives long-term value through continued investments in technology and analytics, while consistently returning excess capital to shareholders via dividends and share buybacks.
BRK.B’s Price Performance
Shares of BRK.B have gained 7.6% year to date, outperforming the industry.
Image Source: Zacks Investment Research
BRK.B’s Expensive Valuation
BRK.B trades at a price-to-book value ratio of 1.59, above the industry average of 1.55. It carries a Value Score of D.
Image Source: Zacks Investment Research
Estimates Movement for BRK.B
The Zacks Consensus Estimate for BRK.B’s second-quarter and third-quarter 2025 EPS has moved down 3% and 0.3%, respectively, over the past 30 days. The consensus estimate for full-year 2025 has increased 0.2% and the same for 2026 has moved 2.7% higher.
Image Source: Zacks Investment Research
The consensus estimates for BRK.B’s 2025 and 2026 revenues indicate a year-over-year increase. While the consensus estimate for BRK.B’s 2025 EPS indicates a decline, the same for 2026 suggests an increase.
BRK.B stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.