2015: Is Berkshire likely to acquire a large commercial insurance company?

GARY RANSOM: Three years ago you noted that you had looked at a large commercial lines insurance company as a possible acquisition, and now you’ve started up Berkshire Specialty, which seems to be off to a good start.

What are your thoughts on whether that has replaced the idea of taking over — of buying or acquiring a large company, or is Berkshire Specialty doing well enough that you’re content with that —

WARREN BUFFETT: Yeah.

GARY RANSOM: — organic growth?

WARREN BUFFETT: I would say that it’s almost certain that we — I don’t want to say 100 percent certain — but it’s almost certain we will not take over a large commercial insurance company.

We’ve got the ideal operation, in my view, in Berkshire Hathaway Specialty.

We’ve got the right people running it. We’ve got Ajit overseeing it. We’ve got more capital than any commercial insurance company in the world so that our securities are — and, therefore, our policies — are really better than anyone else’s.

So, we’ve got all these things going for us. And if we bought a big operation, we would have paid a very substantial nondeductible acquisition premium, and this way we’ve actually made money while we’re in the building stage.

And I think it can be a very, very big operation five or 10 years from now. So it’s almost zero probability that we’ll buy somebody else.

Charlie?

CHARLIE MUNGER: Well, I certainly agree with you.

WARREN BUFFETT: OK. The — that’s how he keeps his job. (Laughter)

We’ll go to — incidentally, all the overflow rooms, including at the Hilton, got filled. I’m not sure where a couple — where station 11 is — but we always lose a fair number at lunchtime.

So I’m sure everybody can find a seat, but we do apologize to those who could not find a seat this morning.