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this question is on Berkshires intrinsic value Warren your most recent annual letter you discuss the methodology to estimate Berkshires intrinsic value however a major component of Berkshires value that many investors find challenging to estimate is that of the company's vast and unique insurance business could you discuss how you value the company's insurance unit based on information Berkshire provides especially since GAAP Book value is not disclosed of the insurance unit well our insurance business gives us a float that's other people's money which we're temporarily holding but which gets regenerated all the time so it's a practical matter it has a very very long life and is probably a little more likely to grow than shrink so we have 124 billion dollars the people and given us and and that's somewhat like having a bank that just consists of one guy and people coming into positive hundred and twenty four billion and promised not to withdraw it forever and we've got a very good insurance business it's taken a very long time to develop it very long time in fact I think we probably have the best property casualty operation all things considered in the world and I know all of any size so it's worth a lot of money it's probably we think it's worth more to us and we particularly think it's worth more lodged inside Berkshire we'd have a very very high value on that I don't want them I don't want to give you an exact number because I don't know the exact number but and any number I would have given you in the past would have turned out to be wrong on the low side we have managed to earn money on money that is given to us for nothing and the sightings from underwriting and that have these large earnings from investing and it's an integral part of Berkshire then there's certain irony to insurance that most people don't think about but if you really are prepared Ainu have a diversified property casualty insurance business a lot of property business in it if you're a really prepared to pay your claims under any circumstances that come along in the next hundred years you have to have so much capital in the business that it's not a very good business and if you really think about a worst-case situation the reinsurance that's insurance you buy from other people as an insurance company to protect you against extreme losses among other things that reinsurance probably it could likely be not good at all so even though you think you're laying off part of the risk if you really take the worst case examples you're not letting up you may well not be laying off the risk and if you keep the capital required to protect against that worst case example you'll have so much capital in the business that it isn't worthwhile Berkshire is really the ideal forum for writing the business because we have this massive amount of assets that in many cases are largely uncorrelated with natural disasters and we can we don't need to buy reinsurance from anybody else and we can use that we can use the money in a more efficient way than most insurance companies it's interesting 3 in the last 30 years the three largest reinsurance companies and I'm counting Lloyd's as one company although it isn't it's a group of brokers a symbol when their underwriters a symbol at a given location but people think of Lloyd's us as a massive reinsurance market which it is not technically one entity but if you take the three largest companies and they're all in fine shape now the first-class operations but all three of them came close to extinction sometime in the last 30 years reasonably close and we didn't really have any truly extraordinary natural catastrophes the worst we had was Katrina and whatever was 2006 or thereabouts 2005 but we didn't have any worst-case situation and all three of those companies which everybody looks at is totally good on the asset side of you sure recoverable from them to tilde three actually made some deals with us to do help them in some way and they're all in fine shape now but it's not a it's really not a good business if you keep your for as a standalone and sure if you keep enough capital to really be sure you can pay anything that comes along under any kind of conditions and Berkshire can do that and it can use the money in ways that likes to use so it's a very valuable asset I don't want to give you an a figure on it but we would not sell it we certainly wouldn't want to sell it for it's it's it's it's float value and if that float is negative it's shown on the balance sheet is a liability so it's extraordinary and taken a long time to build it'd be very very very hard for anybody didn't I don't think they could build anything like it just takes so long and we continue to plow new ground if you want in the next room you would have seen something called 3 which is our movement toward small and medium business owners for commercial insurance and there's an online operation and it will take all kinds we'll do all kinds of mid-course adjusting and that sort of thing where only when we just started up in four states but we'll you know 10 or 20 years from now that will be a significant asset as that of Berkshire just like Geico is growing from doing a fraction billion a premium to you know who knows but well into the mid 30 million just with Tony nicely and when I said in the annual report that Tony nicely who's here today well is there anybody in the world who has a big casualty insurance business that you'd trade our business no no we we really taken a long time and it's taken some tremendous people and Tony nicely has created more than 50 billion with his associates and he's got 39 thousand of them more than probably more now because he's growing this year he's created more than 50 billion dollars that I call a value for Berkshire net it's pretty much what you'd expect it's it's such an easy business taking in money now in cash and just evening the books and give me a little of it back there's a lot of stupidity he gets into it and if you're not way better than average at it you're gonna lose money in the end it's a mediocre business for most people started that Berkshire only because we're a lot better at it we ever stopped being a lot better at it wouldn't be safe for us either and the G Jane has done a similar thing each other than a in in a variety of ways within the insurance business but but I would not want to undo if somebody to have to give me more than 50 billion dollars to undo everything he is producing for Berkshire and he walked into my office on a Saturday and been 1980s he never been an insurance business before and I don't think there's anybody in the insurance world but that doesn't wish them that he'd walked into their office instead of ours of Berkshire it's been extraordinary it's truly been extraordinary but we have Tom Nerney we have Tim Kennedy we have a pro we have Tom Nerney at US liability we we have edge guard insurance we only bought that a few years ago and that's that's a terrific operations based in wilkes-barre Pennsylvania would expect to find a great insurance operation of wilkes-barre but we've got a great insurance really great insurance operation right here in Omaha about two miles from here and it was bought by us in 1967 and and and it changed you know I changed Berkshire we've built on that base we've got it we've really got a great insurance business and I won't give you a number but it's it's probably a bigger number than you've got in your in your head for and it's worth more with in Berkshire then it would be worth as an independent operation somebody can say well this little Jam if it was put out there with southern are multiple or something of the sort it it works much better as being part of a whole where we have had two tiny operations to in tiny insurance operations many many years ago and they've been they both went broke they were never the underwriting was bad but we paid all the claims we did not walk away we paid every dime of claims and nobody worries about doing any kind of financial transaction with Berkshire and you know that today on Saturday about 9:00 in the morning we got a I got a phone call and and people we made a deal the next eight committing Berger to pay out ten billion dollars come hell or high water no outs for you no material adverse change or anything like that and people know we'll be there with ten billion and they know in the insurance business when we write a policy that they can't come be payable during the worst catastrophe in history or may be available fifty years from now they know Berkshire will pay and that's why we've got a hundred and twenty four billion dollars afloat