“Warren Buffett, the former hedge fund manager who built Berkshire Hathaway Inc. into a $195 billion company by gaining leverage through insurance premiums, said this traditional source of new funds is drying up.
Berkshire’s (BRK/A) insurance units, which cover risks from fender benders to asbestos-related hospital bills, can no longer be relied on to provide new investment funds in the form of float, or accumulated premium, Buffett said in a Feb. 25 letter. Float, which rose to $70.6 billion as of Dec. 31 from $65.8 billion a year earlier and $39 million in 1970, is unlikely to “grow much — if at all — from its current level,” Buffett said….”
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