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Berkshire Hathaway’s insurance business faced mounting pressure in the second quarter of 2026 as escalating auto insurance claims costs dragged down underwriting profitability. The conglomerate reported a 14% year-over-year decline in insurance underwriting earnings to $2.18 billion, highlighting the strain building inside one of its key businesses even as the wider company delivered stronger financial results.

The results, released Aug. 8, revealed a sharp contrast across the company’s operations. Berkshire’s overall operating earnings climbed 16%, while net earnings more than doubled to $25.7 billion. Yet within its insurance division, rising claim costs — particularly at Geico — continued to squeeze margins.

Berkshire Hathaway Insurance Earnings Fall as Geico Faces Rising Claims

Geico emerged as a major source of weakness during the quarter. The personal auto insurer recorded a 45.4% year-over-year plunge in pretax underwriting profit to $994 million, according to The Insurer.

The decline reflected increases in both the frequency and severity of claims, putting pressure on the business from two directions. More claims mean more incidents requiring payouts, while higher costs per claim make each case more expensive to resolve.

Auto Claims Frequency and Costs Continue to Climb

Berkshire’s disclosures showed that private passenger auto bodily injury claims frequency rose between 5% and 7% during the first half of 2026 compared with the same period in 2025.

Property damage and collision claims frequency also increased, climbing between 3% and 5%. The additional claims added to the financial burden facing Geico as it worked to maintain underwriting margins.

The cost of individual claims climbed as well. Average bodily injury claims expenses rose between 10% and 12% year over year, further intensifying the pressure on profitability.

Together, the higher number of claims and the growing expense associated with each one created a difficult environment for the insurer, contributing to the sharp drop in its underwriting profit.

Primary Insurance and Reinsurance Help Cushion the Decline

While Geico struggled, other parts of Berkshire’s insurance operations delivered stronger results, helping limit the broader damage.

Berkshire Hathaway Primary Insurance recorded a 333% surge in pretax underwriting earnings to $273 million. The improvement was supported by $268 million in favorable prior-year reserve releases, reflecting claims costs that developed below earlier estimates.

The company’s property and casualty reinsurance business also posted gains. Underwriting earnings increased 8.9% to $1.14 billion, helped by $609 million in favorable reserve adjustments.

These improvements provided a counterweight to Geico’s deterioration, illustrating how performance across Berkshire’s insurance businesses can diverge sharply during the same reporting period.

Insurance Investment Income Also Declines

Despite the gains in primary insurance and reinsurance, the overall insurance picture remained weaker. After-tax underwriting earnings across the insurance operations fell 13.1% to $1.73 billion.

Insurance investment income also moved lower, dropping to $3.06 billion in the second quarter of 2026 from $3.37 billion in the corresponding quarter of 2025.

The decline in investment income added another headwind, leaving Berkshire’s insurance operations contending with weaker underwriting results and reduced income from their investment portfolios.

Stronger Businesses Support Berkshire’s Overall Performance

Outside insurance, Berkshire reported improved operating earnings across its railroad, energy, manufacturing and retailing businesses. Those gains helped counterbalance the insurance division’s weaker performance, allowing the conglomerate to deliver higher overall operating earnings despite the pressure on underwriting profitability.

Berkshire also continued returning capital to shareholders, repurchasing $4.5 billion of its own shares during the quarter.

As of June 30, 2026, the company held approximately $177.5 billion in insurance float — the net liabilities Berkshire assumes under insurance contracts and can invest before claims are paid.

The latest figures show a company experiencing two different financial realities: stronger results across several major businesses, alongside an insurance operation confronting increasingly expensive auto claims. Whether Geico can contain those costs will remain an important factor in Berkshire’s insurance performance as the year progresses.