Investor Warren Buffett’s investment conglomerate, Berkshire Hathaway, is taking a wait-and-see approach on how AI technology evolves in the insurance industry before deploying it within his insurance company, GEICO. 

Some financial services holdings of Berkshire Hathaway are:

• American Express; 

• Bank of America; 

• Citibank;  

• Insurance provider, Chubb Corp; and 

• Brazilian digital bank, Nubank. 

“There is no question in my mind that AI is going to be a game-changer,” Vice Chairman of Insurance Operations Ajit Jain said during the company’s annual meeting on May 3 in Omaha, Neb. “I certainly also feel that people end up spending enormous amounts of money trying to chase the next new fashionable thing.” 

Berkshire is not good at being “the first mover” and is opting for a “wait-and-see” strategy instead, Jain said. 

Until the opportunity with AI crystalizes and Berkshire can fully understand the risk of failure, upsides and downsides, the $1.1 trillion company will avoid deploying the tech, Jain said. 

“We have not yet made a conscious big-time effort in terms of pouring a lot of money into this opportunity,” Jain said. “We will be in a state of readiness and, should the opportunity pop up, we will jump in promptly.” 

The introduction of AI is like letting “a genie out of the bottle, [similar to] when we developed nuclear weapons,” Buffett said. 

“As someone who doesn’t understand a damn thing about it, [AI] has enormous potential for good, [and] enormous potential for harm,” Buffett said. 

Focus on insurance data, analytics  

Insurance giant GEICO has been playing “catch-up” to rivals like Progressive in using data and analytics to better underwrite risk, Jain said. 

“We have hired people who are much better than what they inherited in terms of data analytics and pricing and slicing data,” Jain said.  

Under the stewardship of Todd Combs, chief executive of GEICO since 2020, the company has renewed its commitment to technology, making sizeable gains on its competitors, Jain said.  

GEICO’s telematics — tech that combines telecommunications and information to better assess the value of vehicles — is at par with competitors, Jain said. 

By improving technology, Combs has been able to reduce the GEICO workforce to 20,000 in 2025 from 50,000 in 2020, which has helped it save $2 billion annually, Jain said. 

Avoiding cyber insurance 

As cyberattacks increase, so does the need for cyber insurance. 

Cyber insurance has become a “very fashionable product” recently, Buffett said, adding that the industry has ballooned to $10 billion globally and will continue to grow. 

“We at Berkshire tend to be very, very careful when it comes to taking on cyber insurance liabilities,” said Buffett, who announced at the annual meeting that he would retire at the end of the year. “In our insurance operations, [what] I have told the people running the operations is I’ve discouraged them from writing cyber insurance.” 

Buffett gave two reasons for that guidance: 

• “It’s very difficult to know what is the quantum of losses that can be subject to a single occurrence, and the aggregation potential of cyber losses, especially if some cloud operation comes to a standstill;” and 

• “It’s also very difficult to have some sense of what we call loss cost, or the cost of goods sold, could potentially be.” 

Buffett will be succeeded by Vice Chair Greg Abel.