Greg Abel’s First Big Signals: Insurance Profits Slip, Share Buybacks Begin, and Two Core Holdings Vanish

Greg Abel stepped into an unusually tricky opening act: delivering a first investor message that acknowledged lower 2025 underwriting and investment income at GEICO and other insurance and reinsurance operations, even as the group stayed profitable. The subtext is bigger than one year’s results. Across insurance, reinsurance, and equities, Abel’s early messaging sketches a tighter definition of “core” priorities and a clear willingness to say where performance is deteriorating and where capital will be protected—even if that means slower growth and writing less business.

Insurance as the “heart of Berkshire, ” even as metrics weaken

In a letter to shareholders opening Berkshire’s annual report, Greg Abel described insurance as a permanent cornerstone: “Insurance will continue to be our core. ” That declaration arrived alongside measurable deterioration in 2025 underwriting outcomes across the property/casualty units. Pretax underwriting profits for the P/C operations fell 16. 5% to just over $9. 7 billion, while combined ratios rose across personal lines, commercial lines, and reinsurance.

The biggest drag came from GEICO. The personal lines carrier accounted for more than 50% of the $1. 9 billion year-over-year drop in pretax underwriting profits across Berkshire’s P/C units. Abel also flagged that growth is slowing and may keep slowing into 2026 for the P/C units, a notable near-term caution from a chief executive emphasizing long-duration ownership and structural advantages.

Greg Abel’s GEICO problem: retention pressure meets underwriting discipline

GEICO’s recent broad rate increases restored margins but pressured customer retention, Abel wrote, adding that competitors’ rate reductions “may extend that pressure into 2026. ” The operational challenge is not framed as a quick fix. “Restoring retention while maintaining underwriting discipline will take time, ” he said, positioning the company’s stance as deliberate even if it constrains growth.

The annual report’s Management Discussion and Analysis suggests GEICO may have offset lost customers with new ones. It attributes a 5. 3% increase in written and earned premium levels last year to increased policies in force, though it does not disclose the magnitude of year-over-year policies-in-force growth. On claims costs, the report draws an unfavorable contrast: while State Farm, Progressive, and Allstate posted improvements in loss and loss adjustment expense ratios ranging from 2 points to almost 10 points in 2025, GEICO’s loss and LAE ratio worsened slightly.

Factually, that combination—pressure on retention, an only slightly worse loss/LAE ratio, and higher combined ratios—creates a narrow runway for improving profitability through easy wins. Analytically, it puts greater weight on pricing accuracy and expense control, because the straightforward lever of raising rates is now explicitly tied to retention trade-offs Abel says could persist.

Commercial lines and reinsurance: more capital, softer prices, less appetite

In commercial primary insurance, Abel described demand entering 2025 as solid and pricing in most segments as “adequate or improving. ” Yet as the year progressed, lower pricing or decelerating rate hikes appeared while more capital entered the market. Berkshire’s response was not to chase volume. “We have always prioritized underwriting discipline over volume, ” Abel wrote, explaining that premium growth plateaued as pricing became less attractive.

He also signaled that these dynamics are not fleeting: “We expect these primary insurance businesses to face continued headwinds in 2026, and potentially beyond. ”

On reinsurance, Abel described “similar dynamics, ” pointing to significant increases in available capital from both traditional and alternative markets. He noted a “more benign reinsured catastrophe loss burden in 2025 in most major regions, ” which helped fuel significant property reinsurance price drops. In casualty reinsurance, Abel said claims inflation continued to outpace pricing. The strategic outcome is explicit: “As long as these phases of the cycle endure, we expect to write less reinsurance premium. ”

That stance reads like a governance test for a new CEO: the discipline to accept lower premium volume and potentially less near-term revenue when pricing is inadequate. Abel’s language suggests Berkshire intends to preserve the insurance franchise’s long-term economics rather than smooth short-term results.

Equities: a concentrated “core” list, missing two top holdings

In his inaugural letter to shareholders as CEO, Greg Abel emphasized a “concentrated approach” toward businesses Berkshire intends to hold for decades. He identified Apple Inc., American Express Co., Coca-Cola Co., and Moody’s Corp. as core investments intended to be held for the long term.

Notably absent from the “core” designation were Bank of America Corp. and Chevron Corp., despite being top-five holdings by market value in Berkshire’s fourth-quarter 13F filing. The omission aligns with a 9% reduction in the Bank of America stake during the final quarter of 2025, while the Chevron position increased by 7% in that same period.

These are facts about what was said and what was omitted. The analysis is that Abel appears to be tightening the narrative around what counts as “forever, ” potentially making the shareholder letter itself a clearer map of capital permanence. If so, the omission matters less as a prediction of imminent sales and more as a statement about which positions are meant to anchor Berkshire’s identity under new leadership.

Capital priorities, blunt assessments, and the Buffett-era contrast

Abel’s transition also brought a blunt assessment of underperforming assets. He described Berkshire’s investment in Kraft Heinz Co. as “disappointing, ” stating returns have been “well short of adequate. ” Still, Berkshire has supported a pivot toward operational recovery rather than a previously discussed breakup.

On capital strength, Abel underscored “fortress-like” financial positioning, with cash holdings exceeding $370 billion. His compensation is also a marked departure from the prior era: a $25 million base salary versus Warren Buffett’s long-standing $100, 000.

Separately, Berkshire Hathaway began repurchasing shares, and CEO Greg Abel bought $15 million in stock. While the details of timing and cadence are not provided here, the combination of buybacks and a sizable CEO purchase functions as a tangible capital-allocation and alignment signal alongside the rhetoric of stewardship and decentralized autonomy.

Greg Abel is simultaneously arguing that insurance remains Berkshire’s structural engine, acknowledging that underwriting conditions softened in 2025, and warning that 2026 may not provide quick relief. With share repurchases underway and a more explicit “core” equity framing, the early question is not whether the strategy is changing overnight—but whether the next cycle will test how consistently Greg Abel can match patient discipline with shareholders’ appetite for near-term momentum.