The Berkshire Beat: June 6, 2025
All of the latest Warren Buffett and Berkshire Hathaway news!
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Succession is a hot topic around Berkshire Hathaway these days. And, with so much attention (understandably) focused on Greg Abel stepping in for Warren Buffett as CEO at year’s end, the future leadership of the conglomerate’s vaunted insurance division remains less clear.
Over the last four decades, vice chairman Ajit Jain elevated Berkshire’s insurance operations from a mediocrity into the envy of the industry. I hope he keeps plugging away for many years to come. But it would be naive to ignore the fact that, at some point, the 73-year-old might opt to ride off into retirement.
This all came into sharper focus last weekend when Christopher Bloomstran posted a shortlist of his top in-house candidates to one day replace Ajit atop Berkshire’s insurance empire. Make sure to read the whole thing, but here are the highlights…
Topping the list is Kara Raiguel, CEO of General Re, who Bloomstran considers “likely the lock” to eventually replace Ajit. The 52-year-old came up through National Indemnity before being entrusted with Gen Re in 2016 after Tad Montross’s retirement. In a memo announcing the move, Ajit hailed Raiguel as his “secret weapon” and a “true renaissance woman in the insurance industry”. He also praised her high-performance/zero-maintenance personality — which fits perfectly inside Berkshire’s drama-free culture. “I liken Kara’s relationship with Ajit to the one Ajit shared with Warren over four decades,” writes Bloomstran.
Don Wurster, CEO of National Indemnity, is nearly the same age as Ajit — which might count against him. Or it might not. This is Berkshire, after all. “Don’s reputation in the insurance industry is unrivaled,” says Bloomstran, “as is his willingness to not only accept volume declines but to maintain as much staffing as possible even during periods where significantly less business is being written. Nobody else does this.”
Peter Eastwood, CEO of Berkshire Hathaway Specialty Insurance, came over from AIG and “has been nothing short of phenomenal” in building up the commercial property-casualty unit. With Eastwood, simplicity is the watchword. “One of the most important cultural characteristics of BHSI is our focus on simplicity,” he once said, “or what I refer to as simplicity over complexity. This focus is based on my belief that the business world is unnecessarily complex — and that complexity impedes value creation. Simplicity, on the other hand, is a catalyst for value creation. As a result, simplicity is a guiding principle in the way we’ve gone about building BHSI and how we operate the company. It impacts everything from how we think about internal reporting structures and decision making, to how we handle claims, to the wording of our policy forms.”
Joe Brandon, CEO of Alleghany, returned to the Berkshire fold in 2022 after an earlier stint atop Gen Re. In my previous speculation about Brandon’s potential to succeed Ajit, I noted his impressive track record — and his close relationship with Buffett. Bloomstran agrees: “I’ve met Joe and am impressed with him. I think he’d be terrific running Berkshire’s insurance group … He’s certainly on the list and very near the top.”
Todd Combs, CEO of GEICO, has emerged as a late “wildcard”. His turnaround of GEICO — restoring profitability with some of the industry’s best combined ratios — earned special praise from both Buffett and Jain in recent months. But, as Bloomstran notes, he lacks experience in the critical area of reinsurance.
And, now, on to the latest news and notes out of Omaha…
In a recent episode of the At Barron’s podcast, Bank of America CEO Brian Moynihan discussed Warren Buffett’s decision to trim his stake in the company. “He had a billion shares and he reduced [it] pretty quickly and then slowed down,” said Moynihan. “You can see [that] in the disclosure.” He pointed out, though, that Berkshire has generally been in a selling mood of late — and that the BAC 0.00%↑ sales are no reflection on the bank itself. “[Buffett] has been a great investor for us and been a great supporter of our company for a long time and he’s made a lot of money [for Berkshire] as shareholders.”
If a surge in shipments from China arrives this summer, BNSF Railway is ready. “Post-Fourth of July, we think things will be busy,” vice president Jon Gabriel told FreightWaves. “We’re excited again to demonstrate that we’re ready to move a lot of freight from the supply chain, just like we did in the first quarter.” In California alone, a surge fleet of 100 locomotives is on standby, poised to tackle any spike in demand. Last year, BNSF navigated a similar challenge when shippers front-loaded cargo to dodge labor disruptions. Gabriel also revealed that BNSF intermodal volumes are “modestly” above last year’s levels, with expectations of further pull-forward (from the fourth quarter) still to come this summer as everyone rushes to beat the August 12 tariff deadline. This is becoming something of a new normal for the railroad industry — with the supply chain largely in upheaval going all the way back to the pandemic.
Gabriel noted that a particular strength for the Berkshire-owned railroad is its unmatched capacity in Chicago, otherwise known as “the mid-American chokepoint for rail freight”. BNSF boasts the highest capacity there among all of the Class I railroads — with three facilities dedicated to domestic intermodal transport and one for international freight.
Sirius XM made the Fortune 500 for the first time. And, to mark the occasion, the magazine profiled CEO Jennifer Witz — diving in to her decision to refocus on automobile users with an upcoming low-cost, ad-supported tier that will hopefully spur more subscriptions. But the Fortune article does not shy away from the challenges still facing the satellite radio provider: “Despite its status as a home for some of the most popular entertainers in America and a remarkably healthy, high-free-cash-flow business model admired by the likes of 35% shareholder Berkshire Hathaway, it stares down several existential risks: competition from on-demand streaming audio; a declining and aging subscriber base; and, years beyond that, a world where its core domain — the car — is self-driving, a place for passengers to not just listen to audio but watch its competitors, TV and video.”
And a couple of odds and ends to finish off the week…
This week, Berkshire collected $23.2 million in quarterly dividends from Moody’s, $16 million from Kroger, $4.9 million from Visa, $4.3 million from Capital One Financial, and $1.6 million from Louisiana-Pacific.
At the Edison Electric Institute’s annual conference, Occidental Petroleum CEO Vicki Hollub expressed hope that AI can help the company locate oil beneath salt domes in the Gulf. “Just 20% more production could give the U.S. an oil volume equivalent to Saudi Arabia,” she said.
The question of who will succeed Ajit is extremely important. There are all sorts of risks (like a massive Pacific Northwest earthquake) that have the potential to bankrupt the industry. I trust Ajit and Warren to judge these sorts of risks, writing only when premiums are very attractive and capping our exposure. With Ajit set to be kicked off the board in seven years due to the new retirement age, presumably he will retire as Vice Chairman at that time if not sooner. So the need for visibility into his successor has increased.
Thanks for the confirmation that Berkshire’s insurance has a deep bench of qualified successors to Ajit. That is exactly what I assumed.