FRI, OCT 20, 2023

WARREN BUFFETT WATCH

Tough times for insurers prompt GEICO to cut 6% of workforce

Todd Combs, the CEO of Berkshire Hathaway subsidiary GEICO, (and one of Berkshire two investment managers), has told employees the insurer is "reducing our workforce by roughly 2,000 associates, or 6% of our total workforce."

In an internal letter sent Thursday morning that was provided to me by a company spokesman, Combs said the reductions will "allow us to become more dynamic, agile, and streamline our processes while still serving customers."

He cited a "very difficult period across the industry" with high inflation, longer repair times due to shortages of parts and labor, and rising medical costs all making claims more expensive.

According to the Insurance Journal, several other insurers, including American Family Insurance and Farmers Insurance have already made similar moves.

People pose with GEICO's 'gecko' during Berkshire's annual meeting in Omaha, May 5, 2023. REUTERS/Rachel Mummey

Combs also said the company will be requiring workers to spend more time in the office, with full implementation of the new policy by the beginning of the next year.

It appears GEICO won't be mandating a full return. The letter says, "Managers will soon be sharing employees' required number of in-office days."

In addition, Combs admits GEICO's management needs to do a better job of explaining the "why behind the decisions we are making," calling better employee communications a "priority for our leaders."

BUFFETT AROUND THE INTERNET

Some links may require a subscription

Investor's Business Daily: Warren Buffett's Real Estate Play Gets Goldman Sachs Upgrade As Housing Stocks Enter Pivotal Week

Barrons.com (subscription): Berkshire Bet Against Heavy Florida Hurricane Season. It’s Poised to Cash In.

Inc.: The Billionaire Who Inspired Warren Buffett Just Died at Age 92. Here's Why Buffett Called Him His Hero

Bloomberg.com (subscription): Fund managers follow Warren Buffett’s decision to avoid TSMC

Reuters: China's electric vehicle giant [Berkshire-backed] BYD sees Q3 net profit as much as doubling

Business Insider: Charlie Munger is a fraction as wealthy as Warren Buffett. He'd be worth over $10 billion if he kept all of his Berkshire Hathaway stock.

HIGHLIGHTS FROM THE ARCHIVE

Buffett’s favorite quote on the dangers of gambling on stocks (2021)

Warren Buffett cites a quote from economist John Maynard Keynes as he talks about how many newcomers are treating the stock market as a casino. Charlie Munger complains it’s shameful that some professionals are taking advantage of what he calls “the suckers.”

BERKSHIRE STOCK WATCH

BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Oct. 20, 2023

Berkshire's top holdings of disclosed publicly-traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.

Holdings are as of June 30, 2023 as reported in Berkshire Hathaway’s 13F filing on August 14, 2023, except for:

Mitsubishi and Mitsui, which are as of June 12, 2023. Tokyo Stock Exchange prices are converted to U.S. dollars from Japanese yen.

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTS

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

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Also, Buffett's annual letters to shareholders are highly-recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch

900 Sylvan Avenue, Englewood Cliffs, NJ 07632

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