Berkshire Hathaway (BRK.B, Financials) is scaling back riskier insurance plays, trimming Geico's workforce, and holding fire on AImoves that reflect Buffett's trademark discipline in uncertain times.
Operating income dropped 14% in Q1, hit by insurance underwriting losses and foreign exchange headwinds, Berkshire's latest report showed.
Ajit Jain said Berkshire exited several private equity-influenced insurance deals, calling them too risky and overexposed to regulation. Geico, meanwhile, slashed its workforce from 50,000 to 20,000, a move Jain said is saving $2 billion annually.
Despite the cuts, Jain noted Geico has caught up in telematicsits usage-based pricing is now a competitive edge instead of a weakness.
On artificial intelligence, Jain said Berkshire's insurance arm is AI-ready but hasn't made a big push yet. Buffett added that large-scale AI bets may come within five years, but only if the fundamentals hold up.
Brushing off speculation about succession-linked cash hoarding, Buffett joked, I wouldn't do anything nearly so noble as to withhold investing myself just so that Greg could look good later on.
Buffett said Berkshire's fiduciary mindset is unique, pointing out that other firms can walk away from failed bets he cannot.
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