Historically Berkshire has obtained its insurance float at very low cost, with a cost below zero in about half the years it has operated.

Judge against the float-cost history published in Berkshire's annual reports and shareholder letters up to the 2001 letter (dated 2002-02-28). True: Berkshire's reported float costs show that, over its insurance history, float was usually obtained at very low cost, and that underwriting profits (a float cost below zero) occurred in roughly half of its years in insurance. Allow about 40–60% of years as 'about half'. Mostly true: the low-cost history holds, but the share of years with a cost below zero is moderately outside that band (roughly 33–40% or 60–67%). Mixed: the cost was low on average, but the below-zero share is clearly off (under a third), or the long-run cost was only moderate. Mostly false: the historical cost of float was not low in many periods, and only a few years had a cost below zero. False: the reported figures show that float was historically costly.

Set before the research began.

1. E1 Chairman's Letter Berkshire Hathaway Inc. · 28 February 2001 Own record

   “Over the years, our cost of float has been very close to zero, with the underwriting profits realized in most years offsetting the occasional terrible year such as 1984, when our cost was a staggering 19%.”

2. E2 Some Insight Into How Buffett Has Used Float to Leverage His Ret GuruFocus · 12 November 2019

   “Between 1967 and 1996, Berkshire's insurance business reported a loss in 14 out of 29 years.”

3. E3 Some Insight Into How Buffett Has Used Float to Leverage His Ret GuruFocus · 12 November 2019

   “When you throw in the successful years as well, I calculate the average cost of float between 1967 and 1996 was 3.6%, although that is only based on the cost of float in profitable years being zero (Buffett himself estimated the cost of float at zero between 1967 and 1996).”

4. E4 Berkshire Historical Cost of Float - 1999 to 2008 rationalwalk.com · 21 May 2025

   “* Negative Number for cost of float means that Berkshire was paid to hold the float -- negative cost.”

An independent article (E2) reports that Berkshire's insurance business had a loss in 14 of the 29 years from 1967 to 1996. That leaves underwriting profits, meaning a float cost below zero, in about 15 of 29 years (roughly 52%), which falls inside the 40–60% band. Berkshire's 2000 letter (E1) says the cost of float has been very close to zero over the years, with profits in most years offsetting occasional bad years such as 1984. E3 gives an author-calculated average of 3.6%, which is still low, while noting Buffett's own estimate of about zero. The verdict is mostly true rather than true because the independent count of years stops at 1996 and does not cover 1997–2001, and E3's author-calculated average of 3.6% differs from Buffett's own estimate of zero for 1967–1996 [E3].