Berkshire’s Insurance Profits Implode -54% as Buffett’s Farewell Tour Ends on a Sour Note

“Dad… how big of a disappointment was Berkshire Hathaway during Warren Buffett’s last dance?”

Me:

I’ve got to say, when the ole “Oracle” announced his retirement tour… I was expecting something more reminiscent of Jordan’s Last Dance… instead we got the financial version of Biden’s last year as President.

Needless to say, the final Q4 numbers for 2025 are officially in… and boy did they sh*t the bed.

How bad you ask? Well, let’s just say Berkshire Hathaway posted ONLY Q4 operating earnings of $10.2 billion.

And yes, I realize… $10 billion is still absurd money. But that’s down 29% from $14.56 billion a year ago. And when you’ve spent 60 years compounding at nearly 20% annually, a near -30% drop lands like a scratch on the Mona Lisa.

Now, before you grab a pitchfork and start blaming Greg Abel like he just crashed Dad’s Ferrari… let’s be fair.

The problem wasn’t some hairbrained new AI investment. It was actually insurance… aka the engine that built the empire.

When all was said and done, insurance underwriting profits dived 54%, falling from $3.41 billion to $1.56 billion. And to make matters worse, investment income from that float slid nearly 25%, down to $3.1 billion from $4.088 billion. To put this into context, that’s like watching Tom Brady throw three picks in the Super Bowl. You’re not used to it. And to be completely honest, it feels wrong.

And it wasn’t just the quarter.

Full-year operating earnings came in at $44.49 billion, down from $47.44 billion in 2024. Again, not catastrophic. But definitely not fireworks worthy of a farewell montage for the greatest value investor of all time.

And just when Warren’s farewell tour couldn’t get any more awkward… accounting stepped in with a $4.5 billion haymaker tied to Kraft Heinz and Occidental Petroleum.

Investment gains totaled $13.5 billion in Q4, but that write-down still smacked earnings around like it owed them money. Overall quarterly net earnings dipped to $19.2 billion from $19.7 billion last year.

Meanwhile, the legendary Berkshire war chest shrank slightly… to $373.3 billion, down from a record $381.6 billion in Q3. Meaning: there were no buybacks or headlining acquisitions. It was quite literally just Buffett sitting on a pile of cash and not even moving to change the channel over to the Price is Right.

Now let’s talk about the baton toss.

As of last month, Greg Abel (aka Public Enemy #1 of every Warren superfan) officially took over as CEO of Berkshire Hathaway.

And his first shareholder letter was exactly what you’d expect.

He led with a respectful nod to Warren Buffett and then calmly reassured everyone that he’s not about to start redecorating the place. According to his words… the culture stays, discipline stays, and the old-school financial conservatism that built the empire? That stays too.

Translation: don’t expect Abel to wake up tomorrow and start chasing Palantir or become the Michael Saylor of Omaha.

That said… Abel is making a few tweaks around the edges.

He’s reshuffling the shareholder meeting Q&A lineup and stepping a little further into the spotlight… the natural shift that comes with inheriting the mic.

But structurally, it’s still the same machine.

As in, Buffett remains chairman… he’s still the largest shareholder… and despite what you may hear, he’s still very much present. So this isn’t some hostile takeover or dramatic regime change. It’s more like dad moved upstairs… but he still controls the thermostat.

It’s honestly a little emotional when you zoom out… since 1965, Berkshire has compounded at 19.7% annually (more than double the S&P 500) producing over 6,000,000% in total gains.

Was the final quarter underwhelming? Absolutely.

But if this is what Buffett’s “bad” exit looks like? Most CEOs would commit light treason for numbers that mediocre.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.