As a result, Berkshire cut its exposure to hurricane disasters by more than half. The only thing, insists both Munger and Buffett, that an insurance company should focus on is its profitability as measured by the cost of float, not market share. That’s why Berkshire is perfectly willing to let its employees sit around and do nothing rather than write stupidly priced policies; such an approach is incredibly owner-friendly and will avoid major mistakes.
Long-term, the expectations of the two famous investors is that Berkshire will break even on its float costs, although the ride will assuredly be bumpy as a result of the economics and nature of the super-catastrophe reinsurance industry.
