Berkshire Hathaway's Operating Profit Slips as GEICO Claims Costs Climb

Reinsurance premiums written still grew. Property and casualty premiums written rose 7.0% in the quarter, including a Tokio Marine whole-account quota-share agreement.

That agreement began April 1, 2026, and produced about $700 million of written premiums through September 30.

Crucially, catastrophes were not the cause. Berkshire recorded no losses from significant catastrophe events in the first nine months of 2026.

A significant event means losses exceeding $150 million per event. The first nine months of 2025, by contrast, included $760 million of Southern California wildfire losses in reinsurance property and casualty.

Insurance investment income also fell, to $2.734 billion from $3.181 billion after tax. That is a decline of 14.1%, a TickerGrove calculation.

Insurance premiums earned across Berkshire were flat at $22.435 billion, against $22.445 billion. Insurance float, meanwhile, reached about $178.5 billion at September 30, up about $2.1 billion since year-end 2025.

Railroad, energy and manufacturing offset much of it

BNSF, the railroad, earned $1.729 billion, up from $1.449 billion. That is growth of 19.3%, a TickerGrove calculation.

Railroad transportation revenues rose to $6.840 billion from $5.986 billion. Berkshire Hathaway Energy earned $1.612 billion, up from $1.489 billion, growth of 8.3% on the same calculation basis.

Manufacturing, service and retailing earned $4.042 billion, against $3.616 billion a year earlier. That is growth of 11.8%, a TickerGrove calculation.

The Other segment earned $1.236 billion, down from $1.381 billion. It absorbed foreign-exchange losses of $343 million on non-U.S.-dollar debt, against foreign-exchange gains of $331 million a year earlier.

Total revenues rose to $105.647 billion from $94.972 billion, growth of 11.2% on a TickerGrove calculation. Sales and service revenues climbed to $60.225 billion from $51.011 billion.

A bigger cash pile and a faster buyback

Berkshire's cash and short-term U.S. Treasury Bills totaled about $377.4 billion at September 30, a TickerGrove calculation. The comparable total at December 31, 2025 was about $373.3 billion, on the same basis.

The mix shifted within the pile. Insurance-and-other cash fell to $36.034 billion from $47.719 billion, while short-term Treasury Bills rose to $336.735 billion from $321.434 billion.

Railroad, utilities and energy cash rose to $4.666 billion from $4.158 billion. Investments in equity securities rose to $335.515 billion from $297.778 billion, and total assets reached $1.304 trillion.

Treasury stock at cost rose to $93.348 billion from $78.939 billion, reflecting the year's repurchases. Berkshire's share repurchases totaled about $9.6 billion in the third quarter alone, and about $14.4 billion over nine months.

Class A equivalent shares outstanding fell to 1,418,900 at September 30. Average equivalent Class A shares in the quarter were 1,426,372.

On that share count, operating earnings equal about $5.94 per Class B share equivalent, a TickerGrove calculation. Zacks consensus had expected about $5.91, carried in Quantisnow's preview, so the result landed fractionally above it.

Nine months in, the year still looks stronger

For the first nine months, operating earnings rose to $37.034 billion from $34.286 billion. That is growth of 8.0%, a TickerGrove calculation.

Nine-month net earnings rose to $57.885 billion from $47.769 billion, growth of 21.2% on the same basis. Investment gains over nine months were $20.851 billion, against $17.243 billion.

Within those gains, unrealized gains on equity securities were $11.6 billion over nine months, against $3.3 billion a year earlier. Realized after-tax gains were $9.3 billion, against $14.6 billion.

In the third quarter alone, unrealized equity gains were $7.7 billion, against $9.2 billion a year earlier. Realized after-tax gains were $1.7 billion, against $8.1 billion.

Net earnings per Class A share were $15,502 in the quarter, against $21,413 a year earlier. Per Class B share, net earnings were $10.33, against $14.28.

The nine-month comparison also carries a distortion in its base. The 2025 period included a $3.760 billion other-than-temporary impairment on the Kraft Heinz investment, with no equivalent charge in 2026.

What remains unknown

The release offers no outlook for the rest of the year. Whether GEICO's severity trend moderates, or pricing catches up with claims costs, is not answered in either document.

What the enlarged cash pile is ultimately for also remains unstated. The documents show its size and its mix, not a plan for deploying it.

The pace of buybacks in the fourth quarter is unknown. So is whether insurance pricing can move fast enough to restore last year's underwriting margins.

What Monday and mid-November will test

What to watch: the first market reaction arrives Monday, November 9, because a Saturday release meets no weekend trading. Berkshire's mid-November Form 13F will detail the equity portfolio held at September 30.