Warren Buffett’s Story with GEICO Corporation
Berkshire Annual Letter 1995 (Part 5) Back when Warren Buffett attended Columbia University under the tutorlege of Benjamin Graham, he found out that Ben was the Chairman of Government Employees...
View ArticleInsurance Operations
Berkshire Annual Letter 1995 (Part 6) What counts in the insurance business is the amount of float generated (money held but not owned) and the cost of it. There is float because premiums are always...
View ArticleBerkshire Annual Letter 1996 (Part 2)
Two Acquisitions of 1996 There were two acquisitions by Berkshire in 1996, both with qualities they seek – excellent business economics and an outstanding manager. Kansas Bankers Surety (KBS) This was...
View ArticleSuper-Cat Insurance
Berkshire Annual Letter 1996 (Part 3) In Berkshire’s super-cat business, they sell policies to insurance and reinsurance companies to protect them from the effects of mega-catastrophes. As such events...
View ArticleGEICO
Berkshire Annual Letter 1996 (Part 4) GEICO is an extremely valuable asset to Berkshire and is headed by Tony Nicely, a superb business manager. The strength of GEICO lies in its position as a low-cost...
View ArticleA Discussion on Insurance Float
Berkshire Annual Letter 1997 (Part 4) Unless you understand about “float” and how to measure its cost, you will never be able to make a good estimate about Berkshire’s intrinsic value. Float is money...
View ArticleSuper-Cat Insurance
Berkshire Annual Letter 1997 (Part 5) Continuing on from Warren Buffett’s discussion on insurance float, we now move on to the most volatile form of insurance, the super-cat (or super-catastrophy)...
View ArticleGeneral Re Corp and GEICO
Berkshire Annual Letter 1998 (Part 2) General Re On December 21 1998, Berkshire completed the $22 billion acquisition of General Re Corp. This ownership will allow General Re to operate in whatever...
View ArticlePrinciples of Insurance Underwriting
Berkshire Annual Letter 2001 (Part 2) To understand Berkshire, it is necessary to understand how to evaluate an insurance company. The key factors are: The amount of float that the company generates....
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Loss Development in Insurance Accounting
Berkshire Annual Letter 2001 (Part 3) Warren Buffett recommended reading Jack Welch’s book, Jack, Straight from the Gut. In the words of Warren Buffett, Jack Welch is smart, energetic, hands-on, and...
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