2015: What's the strategy behind Berkshire's direct-to-consumer workers' comp insurance?

GARY RANSOM: You have started a direct workers’ comp operation online, BHDWC.com. It looks a little bit like you’re Geico-izing some of the commercial lines.

What’s the overall strategy of that effort, and how big do you think it can grow, and what concerns might you have on channel conflict with GUARD, who uses independent agents?

WARREN BUFFETT: Yeah. We — well, Progressive did pretty well with the channel conflict between direct writing and agents.

We will find out what the consumer wants. But we are experimenting with online workers’ comp. As you can tell, we’ve done pretty well with online direct auto over the years.

We’ll find out. I don’t think that — I don’t think the channel conflict is a big problem for us. It might be a bigger problem for some other companies, but I don’t think that’s a big problem.

It’s a trickier thing. We write commercial auto through GEICO, and that’s grown and it’s not small, but it hasn’t achieved private passenger auto proportions at all. So we’ll find out.

But we believe in experimenting at Berkshire, and we’ve got the know-how to write that business in direct, and we’ll find out if the customer wants to buy it that way.

We’ve got an awfully good insurance business, but the nature of the insurance business has changed. I mean, GEICO was all direct mail back in 1936, when Leo Goodwin and his wife sat there and stuffed envelopes.

And the basic idea of saving people money on auto insurance continues to this day, but it went from direct mail to — it went to the TV and the phone, went to cable TV, and then went to the Internet and — and goes to mobile and it — you know, the world moves on.

And the key is to be able to save people money and give them good service. And whatever way does that in the most effective way is going to be what wins 20 or 30 or 50 years from now, and we’ll try to stay on top of it.