Berkshire Hathaway reported net earnings of $25.7 billion for the second quarter, more than double the $12.4 billion posted a year earlier, though the increase was driven largely by $12.7 billion in investment gains that the company itself cautions are not indicative of underlying business performance.
Operating earnings, the more relevant measure of the underlying businesses, rose to $13.0 billion from $11.2 billion.
The insurance segment told a mixed story. GEICO's underwriting income fell 45.4% year over year to $994 million, while Allstate's combined ratio improved over the same period, even though both insurers cited the same cost pressure: rising bodily injury severity. The divergence gives brokers a direct comparison of how two major personal auto insurers are handling an identical industry headwind.
GEICO's combined ratio worsened by 7.7 percentage points to 91.2% in the quarter. Its loss ratio climbed to 76.6%, up nearly five points, driven by rising claims frequency and severity.
Bodily injury claims severity ran 10% to 12% higher and bodily injury claims frequency was up 5% to 7% over the first half of the year.
The year-over-year comparison is also flattered somewhat by catastrophe experience, since the first half of 2025 included losses tied to the Southern California wildfires while the first half of 2026 saw no comparably significant catastrophe events.
Allstate's property-liability combined ratio improved 4.5 points to 86.6% in the quarter. The insurer cited $1.5 billion in auto reserve releases for the year to date, roughly half tied to bodily injury claims from accident years 2023 and 2024.
"We don't provide forward-looking severity guidance, but the pure premium trend was down for the quarter. While physical damage severities are moderating, bodily injury severity trends remain at relatively high levels," said Jesse Merten, president of property-liability at Allstate.
Allstate executives said bodily injury severity remains elevated industry-wide, consistent with the pressure GEICO reported, but said the company held sufficient pricing margin to absorb the inflation without disruptive rate action.
Away from GEICO, Berkshire's other insurance operations performed well. Berkshire Hathaway Primary Group's pre-tax underwriting earnings rose 333% to $273 million, and the property and casualty reinsurance group rose 8.9% to $1.14 billion, both aided by favorable prior-year reserve development and an absence of major catastrophe losses.
For brokers placing commercial risk, that points to capacity and competitive terms currently being more available on the reinsurance-backed and primary commercial side of the market than on the personal auto retail side, where severity pressure is actively squeezing margins at scale.
Allstate's improved combined ratio was aided significantly by releasing capital set aside for older claims that came in better than expected, not purely by current-quarter pricing adequacy. Brokers fielding client questions about why one insurer's rates look more competitive than another's should factor in that a strong headline combined ratio can partly reflect accounting timing rather than sustainable underwriting margin.
The contrast shows that a shared industry headwind does not produce a shared outcome. GEICO's underwriting weakness this quarter reflects company-specific reserving and pricing decisions as much as market-wide severity pressure.
For a broker placing personal auto business, "the market is hardening" is not a sufficient explanation to give a client shopping renewal quotes.
The more useful question is which specific carriers on a panel are managing bodily injury severity well through pricing and reserving discipline, and which are absorbing it directly into their loss ratio.
Given GEICO's scale, underwriting income falling by nearly half in a single quarter, driven by claims frequency and severity rather than catastrophes, is the kind of result that typically precedes rate action.
Brokers with GEICO-insured personal auto clients, or clients on carriers pricing competitively against GEICO, should anticipate firming rates and flag that possibility now rather than waiting for the next renewal notice to deliver the surprise.
The severity pressure both companies cited also extends well beyond personal auto. Rising medical costs and greater attorney involvement in claims, often described as social inflation, are the same dynamics pushing up general liability and umbrella pricing across commercial lines.
Brokers advising commercial clients on excess liability towers should treat this personal auto data point as corroborating evidence that litigation-driven severity remains a live, industry-wide underwriting concern rather than a pressure that is cooling.
