Berkshire's new CEO spends the cash pile as insurance profits slide

Overview

Updated 1 hour ago

Berkshire Hathaway bought back $9.6 billion of its own stock in the third quarter, the largest single-quarter repurchase in the company's history. In the same quarter, operating profit from its wholly owned businesses fell 6% to $12.7 billion, dragged down by insurance.

The two numbers describe one shift. Warren Buffett spent his final years unable to find purchases large enough to matter, letting cash build past $350 billion. Greg Abel, three quarters into the job, is spending it on Berkshire itself.

Why it matters

Berkshire holds roughly $377 billion in cash. How Abel deploys it decides which companies get bought, and at what price.

Questions about this story

Free account needed to ask — your question is kept and asked for you right after sign-up. Answers are public.

No questions yet — be the first to ask.

Key Indicators

$9.6B

Third-quarter share buybacks

A single-quarter record for Berkshire, more than double the $4.5 billion repurchased in the second quarter.

$12.7B

Operating earnings

Profit from wholly owned businesses, down from $13.485 billion a year earlier.

-5.8%

Operating earnings, year over year

Insurance underwriting fell 43% and insurance investment income fell 14%.

$377.4B

Cash and Treasury holdings

Up 3% from the second quarter, even after the buyback outlay.

$105.65B

Quarterly revenue

Up 11%, the second straight quarter of double-digit growth.

76.6%

Geico loss ratio

Share of premiums paid out in claims, up from 71.5% a year earlier.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Gregory E. Abel

Chief executive, Berkshire Hathaway

Three quarters into the job; accelerating buybacks and acquisitions

Warren E. Buffett

Chairman emeritus, Berkshire Hathaway

Retired as chief executive at the end of 2025 after 60 years

Organizations Involved

Berkshire Hathaway Inc.

Holding company, largest shareholder

Reporting lower operating profit and record buybacks

A conglomerate spanning insurance, freight rail, utilities, manufacturing and a large public equity portfolio.

GEICO (Government Employees Insurance Company)

Insurance Subsidiary

Underwriting profit down 45% before tax

Berkshire's auto insurance subsidiary, where higher accident losses and advertising spending cut profit.

Timeline

December 2025 November 2026

5 events Latest: Today

Tap a bar to jump to that date

November 2026
Record $9.6 billion buyback as operating profit falls 6%
Today Earnings

Third-quarter operating earnings of $12.7 billion; net income down 28% to $22.1 billion on smaller investment gains.
Today
October 2026
Another $2 billion of stock bought in October
Capital allocation

Repurchases continue into the fourth quarter, though at a slower pace than September.
October 2026
August 2026
Second-quarter buybacks total $4.5 billion
Capital allocation

The pace of repurchases roughly doubles from the first quarter's $234 million.
August 2026
July 2026
Berkshire buys Taylor Morrison for $6.8 billion
Acquisition

Abel's first large acquisition as chief executive, in home building.
July 2026
December 2025
Abel takes over from Buffett
Leadership

Greg Abel becomes chief executive after Buffett's 60 years at the helm; Buffett stays on as chairman emeritus.
December 2025

Scenarios

Berkshire's 2026 buybacks top $20 billion

Likely Resolves by Feb 28, 2027

Discussed by: Berkshire's own disclosure of $14.4 billion through September plus about $2 billion in October

The company has already repurchased roughly $16.4 billion this year. Another $4 billion in the fourth quarter would put 2026 above $20 billion, still short of the 2021 record of $27 billion. The trigger is Abel's judgment that the stock trades below intrinsic value, which the buyback program leaves to him.

Abel announces a multi-billion-dollar acquisition

Possible Resolves by End of 2027

Discussed by: Reuters, citing the Taylor Morrison deal and Alphabet share purchases as evidence of a more active capital allocator

Abel has already spent $6.8 billion on a home builder and taken a 4% stake in an Italian software company. A deal above $10 billion would mark a clear break from Buffett's final years, when Berkshire could not find targets large enough to move earnings.

Insurance weakness drags operating earnings down again

Possible Resolves by Feb 28, 2027

Discussed by: Bloomberg Intelligence analyst Matthew Palazola, who flagged weaker insurance earnings

Geico is cutting prices to win back customers, which raises its loss ratio, while underwriting profit across Berkshire's insurance units fell 43%. If those trends continue into the fourth quarter, operating earnings fall year over year for a second straight quarter.

Cash holdings cross $400 billion

Uncertain Resolves by Feb 28, 2027

Discussed by: Not projected by any cited analyst; a threshold implied by the current $377.4 billion balance

Berkshire's cash grew 3% in the third quarter even after buying back $9.6 billion of stock. Continued operating cash generation, plus any slowdown in purchases, would push the balance past $400 billion.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

2021

Berkshire's record buyback year (2021)

Berkshire repurchased $27 billion of its own stock, the most in any year of Buffett's tenure. The buying came as the company's cash balance swelled and few large acquisitions were available at acceptable prices.

Then

Buybacks shrank the share count and supported per-share earnings.

Now

The year set the benchmark against which Abel's repurchase pace will be measured.

Why this matters now

Abel's $9.6 billion quarter is the largest single quarter on record, but 2026's total still trails 2021's pace.

2020-2025

Buffett's final years of unspent cash

Through the end of his tenure, Buffett told shareholders repeatedly that large acquisitions were scarce and prices high. Berkshire's cash and Treasury holdings climbed into the hundreds of billions while the company bought back stock in modest amounts.

Then

Berkshire underperformed the S&P 500 in several of those years.

Now

Buffett handed Abel a cash pile of roughly $350 billion and a buyback program that leaves the timing decision to the chief executive.

Why this matters now

The third quarter is the clearest evidence yet that Abel intends to spend that pile rather than hold it.