Shoppers are hearing a familiar refrain at Berkshire Hathaway’s annual meeting: price relative to risk drives what the conglomerate will insure. CEO Greg Abel and vice chair Ajit Jain explained why underwriting choices , from ships in the Strait of Hormuz to cyber and AI-era risks , depend on economics, capacity and cautious modelling.
Essential Takeaways
- Price first: Berkshire’s executives say they’ll write unusual or large risks, but only at the right price that compensates for the uncertainty.
- Capacity matters: Other insurers have stepped into higher-risk marine cover because they’re sitting on excess capital and want to deploy it.
- Cyber caution: Berkshire has largely stayed on the sidelines of cyber insurance, citing difficulty modelling aggregate exposure and falling premiums.
- AI as a tool, not a magic wand: Jain sees AI helping productivity; Abel points to faster, broader underwriting insights, but both stop short of trusting AI for full claim or pricing decisions.
- Selective participation: Berkshire has taken small parts in programmes , for example, schemes to insure ships transiting Hormuz , but hasn’t yet written large deals pending underwriting details.
Price trumps glamour: why Berkshire waits for the right number
At the heart of Berkshire’s underwriting philosophy was a short, blunt message: it depends on the price. That echoed Warren Buffett’s old line that if someone can name a coverage and an acceptable price, Berkshire will consider it. The obvious human detail here is the tension between bold underwriting and an insurer’s stomach for worst-case scenarios. Jain and Abel both stressed that the first question underwriters ask is how bad could bad be, and if that isn’t answerable, they’ll hold back. Practically, that means buyers looking for cover need to show not just need, but a premium that reflects potentially massive losses.
Marine cover: capacity and capital are pushing the market
When it comes to ships in the Strait of Hormuz, Jain said there’s capacity ready to write the business because firms are sitting on excess capital and want to deploy it. That matches market reporting that war-risk and political-risk cover have become available from brokers and carriers keen to fill gaps created by conflict. Berkshire has taken small participations in programmes designed for that route, but underwriters there are still fine-tuning terms , including guarantees like naval escorts , before committing to large policies. For shipowners, that means cover exists, but terms, limits and price will vary widely as insurers balance appetite and potential losses.
Cyber insurance: fashionable today, cautious tomorrow
Jain described cyber insurance as “very popular, fashionable” and explained why Berkshire has been cautious: modelling aggregation is hard and premiums have been falling because those who entered early made profits. With supply outstripping demand, prices aren’t attractive. So Berkshire has stayed on the sidelines while watching how exposure and pricing evolve. The takeaway for firms buying cyber cover is to shop carefully: cheaper premiums can look attractive in the short term, but they may not reflect the true tail risk if models and aggregate scenarios are still immature.
AI in insurance: productivity now, decision-making later
Both executives accepted that AI is reshaping the business, but they draw a distinction between using AI to boost productivity and depending on it for complex trade-offs. Jain sees AI today as a tool for routine work and cost savings, not as a reliable substitute for nuanced pricing or claims decisions. Abel pointed to concrete gains at GEICO and within Berkshire’s underwriting teams, where technology now lets underwriters quickly assess more than just the top few risks. That means faster, broader views on exposure , helpful when you want to understand 20 risks instead of five , but the human judgement piece still matters for big-ticket decisions.
What this means for buyers and brokers
If you’re seeking unusual or high-limit coverage, expect conversations to be rooted in numbers and worst-case scenarios. Insurers like Berkshire will ask: how bad can it get, and is the premium worth the uncertainty? For brokers, that reinforces the need to quantify aggregation, propose realistic loss scenarios and price cover to attract conservative underwriters. And for buyers of cyber and AI-related covers, be prepared for evolving products: terms and capacity may shift as modelling improves and as supply and demand rebalance.
It’s a small change in phrasing, perhaps, but one that makes a big difference at renewal time: if you want cover, show the maths and be ready to pay for peace of mind.
Source Reference Map
Story idea inspired by: [1]
Sources by paragraph:
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article was published on May 5, 2026, and references the Berkshire Hathaway annual meeting held on May 2, 2026. Similar content has appeared in reputable sources such as Carrier Management and The Insurer, dated May 3 and May 4, 2026, respectively. ([carriermanagement.com](https://www.carriermanagement.com/news/2026/05/03/287477.htm?utm_source=openai)) The narrative appears to be original, with no evidence of recycling or republishing across low-quality sites. However, the presence of similar content in other reputable sources suggests a moderate level of freshness.
Quotes check
Score:
7
Notes:
Direct quotes from CEO Greg Abel and Vice Chair Ajit Jain are used in the article. The earliest known usage of these quotes appears in the Carrier Management article published on May 3, 2026. ([carriermanagement.com](https://www.carriermanagement.com/news/2026/05/03/287477.htm?utm_source=openai)) The quotes are consistent across sources, indicating they are not reused from earlier material. However, the lack of independent verification for these quotes raises some concerns.
Source reliability
Score:
8
Notes:
The article originates from Claims Journal, a reputable publication in the insurance industry. The content is supported by references to other reputable sources, including Carrier Management and The Insurer. However, the article includes a ‘Source Reference Map’ section, which lists the Claims Journal article itself as a source, indicating potential self-referencing. This could be a concern regarding source independence.
Plausibility check
Score:
9
Notes:
The claims made in the article align with known information about Berkshire Hathaway’s underwriting philosophy and recent industry developments. The article provides specific details, such as the participation in programs to insure ships in the Strait of Hormuz and the cautious approach to cyber insurance, which are consistent with statements from CEO Greg Abel and Vice Chair Ajit Jain. The language and tone are appropriate for the subject matter and region.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article provides a factual account of Berkshire Hathaway’s underwriting philosophy, supported by references to reputable sources. However, concerns regarding the freshness of the content, the self-referencing nature of the ‘Source Reference Map’ section, and the lack of independent verification for the quotes used in the article suggest a moderate level of confidence in its accuracy. It is recommended to seek additional independent verification for the quotes and to be cautious of potential self-referencing in the ‘Source Reference Map’ section.
