Berkshire Hathaway’s underwriting earnings rose 66% to $US9.02 billion ($14.18 billion) last year, led by the Geico motor business, where a turnaround gathered strength.

Chairman Warren Buffett says Geico “was a long-held gem that needed major repolishing” and division CEO Todd Combs has reshaped the business in the past five years, increasing efficiency and bringing underwriting practices up to date.

Geico’s earnings rose to $US7.8 billion ($12.3 billion) last year from $US3.6 billion ($5.7 billion) in 2023 after a significant loss in 2022. 

In other insurance divisions, Berkshire Hathaway Primary Group earnings fell 38% to $US855 million ($1.34 billion) and the reinsurance group’s result rose 44% to $US2.74 billion ($4.3 billion).

“In general, property-casualty insurance pricing strengthened during 2024, reflecting a major increase in damage from convective storms,” Mr Buffett said in a letter to shareholders. “Climate change may have been announcing its arrival. However, no ‘monster’ event occurred.”

The overall underwriting result included estimated claims from hurricanes Helene and Milton of $US1.2 billion ($1.9 billion) after tax.

In a preliminary estimate, the group says it could incur pre-tax losses of about $US1.3 billion ($2 billion) from the southern California wildfires last month.

Berkshire Hathaway insurance investment income rose to $US13.67 billion ($21.49 billion) from $US9.57 billion ($15 billion).

Mr Buffett says in the letter that pricing property and casualty insurance is “part art, part science and is definitely not a business for optimists”, but “all things considered” the diversified group likes the business.

“Berkshire can financially and psychologically handle extreme losses without blinking. We are also not dependent on reinsurers, and that gives us a material and enduring cost advantage.” 

The company’s operations include rail freight and a group of utility and energy generation and distribution businesses, plus manufacturing and retailing activities.