2010: Why doesn't Berkshire sell car insurance overseas?
CAROL LOOMIS: “Our car insurance business” —
Oh, this comes from a New York man who asked that I use his initials, A.J.
“Our car insurance business has continued to return excellent profits and expand its business within the United States. Why hasn’t Berkshire made any progress in the car insurance business in China, or India, or even Europe?
“As BYD has shown, these markets are exploding in automobile sales, so aren’t they ripe for the picking?”
WARREN BUFFETT: Yeah. There’s no — we’ve known for a long time there’s no shortage of drivers around the world. That — there may be a lot of business in the United States, but there’s a whole lot of business elsewhere.
In terms of India and China specifically, we can only own a limited amount, I believe 24.9 percent, of a company in either of those countries. And we’re not eager to work hard on something where we own 24.9 when we could work hard on something where we can own 100 percent.
Obviously, we talk all the time, we’ve thought for decades about ways we can possibly expand GEICO, because it’s a wonderful, wonderful company.
And we have gone from a market share of 2-and-a-faction percent when we bought control to 8 1/2 or so now.
But there’s plenty to do here. And we do not have the same kind of advantages — or we don’t think we could build those in any reasonable period of time — as we look at other markets.
I mean, obviously we look at Canada. You know, I mean — Tony and I talk about this kind of thing frequently.
I agree with his decision that now, and probably for a long time to come, there is so much opportunity in the United States. And the other areas, for one reason or another, as we’re looking at them, do not give us the same kind of competitive advantage we have here, that we pass on them.
But we love the idea of taking a business that’s working in one area and figuring out a way to have it work in other areas. Whether it’s geographical adjacencies or product extensions, or all kinds of things.
We’re well aware of possibilities out there. In the case of GEICO, we have not decided to go to other countries, but it isn’t because we didn’t know there were cars there. (Laughter)
Charlie?
CHARLIE MUNGER: I’ve got nothing to add. (Laughter)