SINGAPORE – For decades, Warren Buffett’s Berkshire Hathaway has been one of the world’s most powerful names in insurance and investment – a symbol of financial strength and disciplined risk-taking from Omaha to Singapore. But as the 95-year-old prepares to hand over the reins of his US$900 billion empire, investors and analysts are questioning whether the company’s long golden run is nearing its end.
This week, Wall Street brokerage Keefe, Bruyette & Woods (KBW) downgraded Berkshire to underperform, a rare move against one of the most respected firms in global finance. The analysts, led by Meyer Shields, cut their price target for Berkshire’s Class A shares to US$700,000, warning that “many things [are] moving in the wrong direction.”
The downgrade reflects growing concerns about falling interest rates, slower earnings in its industrial and energy divisions, and weakening profitability in key insurance operations – the very businesses that have been Berkshire’s financial foundation for more than half a century.
Insurance remains central to Berkshire Hathaway’s model, providing the “float” – premiums collected in advance of claims – that the group invests across global markets. The company’s insurers, which include auto giant GEICO and global reinsurer Berkshire Hathaway Reinsurance Group, generated roughly US$11 billion in underwriting profit last year and maintained an enormous US$171 billion in investable capital.
But KBW warned that the insurance engine is showing signs of strain. GEICO has been lowering premiums and increasing advertising spending to win back market share from rivals, a move expected to push claims costs higher after a period of improvement. The group’s reinsurance arm, meanwhile, faces weaker demand and reduced pricing following a mild hurricane season.
At the same time, Berkshire’s US$344 billion cash portfolio – invested largely in short-term U.S. Treasuries – is earning less as interest rates decline, threatening one of its most stable profit sources.
Across Asia, Berkshire Hathaway has built a measured but meaningful presence. Its key regional operation, Berkshire Hathaway Specialty Insurance (BHSI) Asia, is headquartered in Singapore with offices in Hong Kong, Kuala Lumpur, Tokyo, Seoul and Manila. The company underwrites commercial property, casualty, financial and executive lines, marine, healthcare and accident & health insurance, serving multinational and regional clients.
BHSI’s Singapore arm, established in 2014, has become a significant player in Asia’s specialty market, known for its disciplined underwriting and capacity to write high-limit, complex risks. Its financial strength, backed by Berkshire’s AA+ credit rating, has given it an advantage with regional brokers seeking secure long-term partners.
In Japan and Korea, the group’s reinsurance unit, Berkshire Hathaway Reinsurance Group, provides large-scale treaty and facultative cover, particularly for catastrophe and life risks. The company has also expanded in Hong Kong and Malaysia, reflecting growing Asian demand for stable, globally rated insurers amid capacity constraints at local carriers.
Beyond insurance, KBW’s report highlighted softness in Berkshire’s industrial and energy businesses. Burlington Northern Santa Fe, its U.S. railway, remains vulnerable to global trade tensions, while Berkshire Hathaway Energy may face reduced profitability as the One Big Beautiful Bill Act accelerates the phase-out of American clean-energy tax credits.
These pressures, combined with the uncertainty surrounding Mr Buffett’s succession, have caused Berkshire’s shares to lag the S&P 500 by almost 30 percentage points this year. Investors appear to be pricing in the slow fading of what has long been called the “Buffett premium” – the market’s extra confidence in his judgment and long-term discipline.
For Asian insurers, brokers and reinsurers, Berkshire’s evolution carries particular significance. The group’s financial strength has long underpinned capacity in the regional reinsurance and corporate markets. If margins at GEICO and the reinsurance division tighten, Berkshire may adopt a more selective underwriting stance, influencing risk pricing and available capacity across the Asia-Pacific region.
Still, the company’s commitment to the region appears firm. BHSI continues to expand cautiously, leveraging its global balance sheet to offer stable capacity at a time of increased weather and geopolitical volatility. Its conservative reserving and long-term approach have made it a trusted counterparty in markets such as Singapore, Hong Kong and Japan.
Berkshire Hathaway will release its third-quarter results on November 1 – a key test for investors assessing how the company performs without Mr Buffett’s daily oversight.
For Asia’s insurance community, the outcome will be closely watched. Berkshire’s vast capital base and disciplined underwriting remain pillars of global stability, but the question now is whether the next generation of leaders can preserve that legacy in a shifting world.
