Berkshire Hathaway annual meeting 2022

Berkshire Hathaway Vice Chairman Ajit Jain, who runs all of the conglomerate’s insurance businesses, lamented about how Geico has fallen behind rival Progressive in the car insurance business.

“Each one have their plusses and minuses, but having said that, there’s no question that recently Progressive has done a much better job than Geico … both in terms of margins and in terms of growth,” Jain said.

“There are a number of causes for that, but I think the biggest culprit is as far as Geico is concerned … is telematics,” he added. Telematics refers to putting a device on a car that tracks driving patterns, in exchange for a lower insurance rate.

“Progressive has been on the telematics bandwagon for more than 10 years. Geico, until recently, wasn’t involved in telematics,” Jain said. “It’s a long journey, but the journey has started, and the initial results are promising. It will take a while, but my hope is that in the next year or two, Geico will be positioned to catch up with Progressive.”

Jain’s comments came after Berkshire reported earlier in the day a massive earnings drop in its insurance underwriting business for the first quarter.

— Fred Imbert

Berkshire Hathaway Vice Chairman Charlie Munger had some stern words in response to a proposal to oust CEO Warren Buffett as chairman.

“It’s the most ridiculous criticism I ever heard,” Munger said.

“It’s like Odysseus would come back from winning the battle of Troy and so forth and some guy would say, ‘I don’t like the way you were holding your spear when you won that battle,'” he added, referencing ancient Greek epic “The Odyssey.”

The California Public Employees’ Retirement System, or CalPERS, the biggest public pension fund in the U.S., earlier this month said it would vote in favor of a shareholder proposal to remove Buffett from his chairman role while remaining CEO. The proposal’s aim stems from concerns about corporate governance with one person holding dual roles.

“Some guy that’s never run any business, doesn’t know anything — I don’t think too much of this activity,” Munger said.

—Hannah Miao

Munger said today’s stock market has become “almost a mania of speculation.”

His comment alluded to both high frequency algorithmic trading and access new investors have that intensified during the pandemic.

“We have computers with algorithms trading against other computers,” Munger said. “We’ve got people who know nothing about stocks, being advised by stockbrokers who know even less.

“I understand the commission though,” Buffett joked.

After Munger likened the activity to a casino, where people play craps and roulette, Buffett expanded on the comparison….