GEICO reported a substantial pre-tax underwriting profit of $1.82 billion for Q2 2025, a 2% increase from the same period last year. The growth was primarily driven by higher average earned premiums per policy and a decline in claims frequency.
The results were announced as part of the financial filings for its parent company, Berkshire Hathaway Inc.
The company's premiums written grew by $545 million, or 5.2%, during the second quarter and $1.3 billion, or 5.9%, in the first six months of the year, compared to 2024. These increases reflect both a rise in the number of policies in force and higher average premiums per policy.
While claims frequency was down, the insurer noted that increases in average claims severities partially offset the positive impact on its loss ratio. The loss ratio, which represents losses and loss adjustment expenses as a percentage of premiums earned, decreased to 71.8% in Q2, down 2.3 percentage points from 2024. The growing complexity of vehicle technology, particularly ADAS, and ongoing inflation in the costs of parts and labor are key factors driving up claim severity.
GEICO's underwriting expenses saw a sharp increase, rising $370 million (39.9%) in the second quarter and $633 million (34.8%) for the first half of 2025. This was attributed to increased policy acquisition-related expenses, showing a concerted effort by the insurer to expand its customer base and grow market share.
