Key Insights from Buffett’s 2025 Shareholder Letter

A major part of the letter is devoted to Berkshire’s insurance segment. Buffett reports significant earnings growth in the insurance business, particularly highlighting GEICO’s improved efficiency and updated underwriting standards under Todd Combs. Although GEICO’s transformation is still in progress, the progress made in 2024 was impressive. Additionally, Buffett discusses the property and casualty (P/C) sector, noting that P/C pricing strengthened in 2024 even as losses from convective storms increased. While there have been no catastrophic events, he cautions that the unpredictable nature of such events means a truly shocking loss could occur at any time. The letter also points out the advantage of collecting cash up front with P/C insurance—a model that has allowed Berkshire to accumulate a sizeable float over time, which has grown from $46 billion to $171 billion in recent decades^[1].

Buffett marks a historical milestone regarding tax contributions. Berkshire Hathaway made four tax payments totaling $26.8 billion in 2024, which accounts for about 5% of all taxes paid by U.S. corporations. This record tax payment is attributed to the company’s long-standing reinvestment strategy, in which shareholders received only one cash dividend from 1965 to 2024. Rather than paying out frequent dividends, this approach has allowed Berkshire to build taxable income continuously over time. Buffett’s discussion of the tax figures serves to illustrate the long-term benefits of reinvesting earnings rather than distributing them as cash, thereby strengthening the foundation for future growth and supporting public finances^[1].

The letter reaffirms Berkshire’s commitment to keeping the majority of shareholder funds invested in equities instead of cash equivalents. Buffett notes that despite occasional opportunities, the company prefers to remain fully invested in stocks, particularly those of U.S. companies with strong fundamentals. He also outlines a growing focus on international diversification through investments in Japan. Berkshire has been acquiring stakes in five leading Japanese companies—Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo—since July 2019. These investments, which began with a total cost of $13.8 billion and have grown to a market value of $23.5 billion by the end of 2024, are intended for long-term holdings. The approach includes maintaining a controlled position below 10% for each company, along with balancing yen-denominated borrowings to achieve currency neutrality. This strategy reinforces the company’s belief in the enduring quality of well-managed businesses both domestically and internationally^[1].

Buffett’s letter includes a broader reflection on the merits of American capitalism. He underscores that the success of Berkshire Hathaway and the nation itself is tied to a culture of continuous savings and reinvestment. By choosing reinvestment over dividend payments, Berkshire’s shareholders have contributed to the accumulation of wealth over several decades. Furthermore, Buffett emphasizes that this system—despite its occasional flaws—is capable of extraordinary achievements and has enabled the United States to make remarkable progress over its 235-year history. He stresses the importance of prudent savings and wise investment decisions in driving economic growth, even as challenges such as climate change and unpredictable losses in insurance persist^[1].

In addition to financial and strategic topics, Buffett gives details about the upcoming Omaha Annual Meetup, which serves as a platform for shareholder engagement and community building. The letter outlines a schedule filled with speeches, a question-and-answer session, and themed events such as the popular Brooks Run. These gatherings are designed not only to provide updates on Berkshire Hathaway's performance but also to strengthen the sense of community among shareholders. Buffett even highlights a philanthropic initiative that involves donating signed copies of a new book to support services for homeless adults and children, underscoring the company’s commitment to giving back. This focus on community underscores the importance Buffett places on maintaining strong ties between corporate success and societal well-being^[1].