Berkshire's Ajit Jain calls out corruption and skyrocketing prices in Florida's insurance market

This question comes from Rich McCluskey and Dunedin, FL. He says, Warren and Ajit, would you let us know what you think about the car and property insurance situation in Florida? As a resident, both seem out of control since the Florida market seems to be so mismanaged. Is this an opportunity for Berkshire? Yeah, the Florida market, both for auto insurance and for homeowners insurance. Has had a few tough years. The 2 problems we face in Florida and all the risk barriers face in Florida, one is the lawyers and the amount of corruption that takes place in the Florida market is keep skyrocketing, making it difficult for us to price, price the product and make a profit. And secondly, the amount of activity in terms of storms, both the frequency and the severity is also so severe that. The losses in Florida tend to make it very difficult for a risk bearer to make money. Having said that, we’ve had a, we’ve fortunately had a very good run at Florida last year. We increased our exposure in Florida as we talked about last year and fortunately nothing bad happened. So a lot of our premiums that were in the top line flow straight to the bottom line. Florida is a large market. Florida is a market that’s subsidized by the rest of the country. I don’t think those. That’s going to stand the test of time. The Florida market, the legislators are trying to improve it. They have passed law that is bringing down the amount of fraud that takes place in Florida. And I hope Florida will be fairly buoyant insurance market because at the end of the day, they do believe in the free market more than some of the other states that have an insurance crisis like California and New York. So yes, Florida has a problem. Prices will go up fairly substantially. But at the end of the day, I think we’ll achieve a degree of balance so that the risk bearers can make a decent profit and we’ll be deploying capital out there.