Core Insights - The Federal Reserve has cut interest rates for the third time in 2025, with a possibility of another cut next year, while equity markets are performing well due to economic growth [1] - The insurance industry is influenced by better pricing, climate-related risks, and rapid digitalization, with improved pricing supporting profitability despite catastrophe losses [1] Group 1: Berkshire Hathaway (BRK.B) - Berkshire Hathaway is a diversified conglomerate with over 90 subsidiaries, with insurance accounting for about 25% of total revenues, providing stability and reducing concentration risk [4] - The company has a strong financial position with a growing insurance float, which increased from approximately $114 billion in 2017 to about $176 billion by Q3 2025, allowing for low-cost funding for high-quality investments [7] - Berkshire's return on equity is 7.3%, which lags the industry average, but the company has shown improvement over time, with shares gaining 11.7% year to date [8] Group 2: MetLife (MET) - MetLife's New Frontier strategy focuses on cost cuts, global growth, and AI-driven operational efficiency, with a return on equity of 21% and an estimated EPS growth of 7.2% for 2025 [10][15] - The company offers a wide range of protection and investment solutions, benefiting from superior retention and cross-selling opportunities, supported by a diversified geographic footprint [12] - MetLife's strategy includes a 100-basis-point reduction in unit costs over five years and selective acquisitions to strengthen its market position [13][14] Group 3: Financial Estimates and Valuation - The Zacks Consensus Estimate for BRK.B's 2025 revenues implies a 3.5% year-over-year increase, while EPS estimates indicate a 5.2% decline, although EPS estimates have increased by 6.7% in the past 30 days [16] - For MET, the 2025 revenue estimate suggests an 8.2% year-over-year increase, with EPS expected to grow by 7.2%, although EPS estimates have slightly decreased by 0.1% recently [18] - Berkshire is trading at a price-to-book multiple of 1.56, while MET's multiple is at 1.88, both above their respective five-year medians [19]