"State Farm is still doing more business than anybody, and it shouldn’t exist under capitalism"

[marindependent]

"State Farm is still doing more business than anybody, and it shouldn’t exist under capitalism"
Warren Buffett

Other Quotes:
"“The largest auto insurance company in the United States was started over in Illinois by a guy who didn’t know anything about insurance particularly. And it’s a mutual company. It’s not supposed to succeed in capitalism,” said Berkshire Hathaway’s chair and chief executive officer, referring to State Farm.
...
“We spend $2 billion a year telling people the same thing we’ve been telling them for 70 or 80 years.” But when all is said and done, “State Farm is still doing more business than anybody, and it shouldn’t exist under capitalism.”

“If you [had] a plan to start a State Farm today and had to compete with Progressive, who would put up the capital [for] a mutual company that you’re not going get the profits from? It doesn’t make any sense at all,” he said.
...
“There’s no question that personal automobile insurance business is very competitive business. Having said that, both GEICO and Progressive are two very successful competitors. Each one of them have their pluses and minuses,” Jain said.

“There’s no question that more recently, Progressive has done a much better job than GEICO…in terms of margin and in terms of growth rate. There are a number of causes for that, but I think the biggest culprit as far as GEICO is concerned…is telematics.

“Progressive has been on the telematics bandwagon for, I don’t know, more than 10 years, 20 years. GEICO until recently wasn’t involved in telematics. It’s been only the last two years that we made a very serious effort in terms of using telematics for segmentation and trying to match rate and risk.

read the rest here
State Farm Still Wins: Buffett Talks Auto Insurance at Annual Event

 

[Markthebroker]

Interesting article. State Farm can sometimes be very competitive and their claims handling and customer service is great. For higher net worth individuals and people that are willing to pay for good service, I suspect State Farm will do just fine over the next several years. After the way they handled my claims, I'll probably be with them for a very long time.

It's worth noting, as an agent, I generally find all the Berkshire companies very difficult to deal with, so I always take that into consideration whenever I read an article like this.

 

[adjusterjack]

"State Farm is still doing more business than anybody, and it shouldn’t exist under capitalism"
Warren Buffett

I'm surprised that Warren Buffett would say something so incredibly stupid. State Farm does exist and It's doing very well.

 

[Markthebroker]

I'm surprised that Warren Buffett would say something so incredibly stupid. State Farm does exist and It's doing very well.

Buffet has said some things I find suspicious, and sometimes seems to run counter to his actions.

 

[AZDave]

I think this says alot about the role of an Agent. These big captives remain in top market share not by rate alone. Givin a competitive choice, I believe the consumer would choose an Agent serviced policy over direct.

But man, those Captive Agents keep getting squeezed on commissions.

 

[Travis Price]

I'm surprised that Warren Buffett would say something so incredibly stupid. State Farm does exist and It's doing very well.

I'm not. Buffet and co still think trains are a good bet.

 

[Markthebroker]

I'm not. Buffet and co still think trains are a good bet.

To be fair, he is the richest investor in the world, and non tech plays are a lot easier to value and invest in. Generally the older and more physical and "brick and mortar" something is, the easier it is to evaluate. I heard Michael Saylor bashing on Buffet for missing out on some tech plays, however at the end of the day, Michael Saylor has had nowhere near the investing success that Buffett has. I mean, not even close.

But yeah, some of the stuff he says, like what he said about gold and bitcoin, doesn't really seem right. Until about a year ago, the succession plan for the then 89 year old Buffett was then 96 year old Munger.

 

[Travis Price]

To be fair, he is the richest investor in the world, and non tech plays are a lot easier to value and invest in. Generally the older and more physical and "brick and mortar" something is, the easier it is to evaluate. I heard Michael Saylor bashing on Buffet for missing out on some tech plays, however at the end of the day, Michael Saylor has had nowhere near the investing success that Buffett has. I mean, not even close

I wasn't comparing Buffet to Saylor. Buffet historically doesn't do tech, because it's not what he knows.

Which is fine.. But guys like he and Munger are protecting what they have, which is what you'd expect. Just saying that he's a dinosaur doing dinosaur things.

 

[Markthebroker]

I wasn't comparing Buffet to Saylor. Buffet historically doesn't do tech, because it's not what he knows.

Which is fine.. But guys like he and Munger are protecting what they have, which is what you'd expect. Just saying that he's a dinosaur doing dinosaur things.

Yeah, he figured out a long time ago what he's good at, and leveraged it. He'd be nuts to reinvent the wheel now, or at any point.

 

[TheMedicareWizard]

Buffet and co still think trains are a good bet.

They seem like a hell of a better bet than ever-widening roads from sprawling suburbia to city centers that don't really do much to mitigate awful traffic because everyone needs to be in their own little aluminum bubble during their 45 minute commute that only exists because of an overreliance on automobile-based infrastructure.