Company: BRK-A
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000950170-25-025210
Chunk: 205

Company: BERKSHIRE HATHAWAY INC
Filing Date: 2025-02-24
Form: 10-K
Item: Item 7
Chunk 205
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Claims frequencies declined in 2024 versus 2023 for property damage (two to three percent range) and collision (eight to nine percent range) coverages, with bodily injury down slightly. Average claims severities increased in 2024 for property damage and collision (two to five percent range) and bodily injury coverages (eight to ten percent range) compared to 2023. Losses and loss adjustment expenses incurred in 2024 from Hurricanes Helene and Milton were approximately $360 million. Reductions in the ultimate loss estimates for prior accident years’ claims were $550 million in 2024 compared to $1.5 billion in 2023. 

Underwriting expenses increased 7.7% in 2024 compared to 2023. GEICO’s expense ratio (underwriting expense to premiums earned) was 9.7% in 2024, unchanged from 2023, as improved operating efficiencies and increased operating leverage were offset by increased advertising expenses. The earnings from GEICO’s insurance agency (third-party commissions, net of operating expenses) are included as a reduction of underwriting expenses. 

2023 versus 2022

GEICO’s pre-tax underwriting earnings increase in 2023 reflected higher average premiums per auto policy, lower claims frequencies, more favorable development of prior accident years’ claims estimates and lower advertising costs. However, average claims severities increased in 2023 due to higher auto repair parts prices, labor costs and medical inflation. GEICO sought rate increases in numerous states in 2022 and 2023 in response to accelerating claims costs.

K-35

Management’s Discussion and Analysis 

Insurance—Underwriting 

GEICO 

Premiums written increased $730 million (1.9%) in 2023 compared to 2022, reflecting higher average premiums per auto policy (16.8%) due to rate increases, partially offset by a 9.8% decrease in policies-in-force. Premiums earned increased $280 million (0.7%) in 2023 compared to 2022. Reductions in advertising expenditures in 2022 and 2023 contributed to reductions of policies-in-force. 

Losses and loss adjustment expenses decreased $4.5 billion (12.4%) in 2023. GEICO’s loss ratio declined 12.1 percentage points compared to 2022, reflecting the impact of higher average premiums per auto policy, lower property damage and collision claims frequencies and increased favorable development of prior accident years’ claims estimates, partially offset