Vice Chairman of Insurance Operations & Director, Berkshire Hathaway
Greg Abel on succession plans for Ajit Jain and himself
Berkshire Hathaway CEO Greg Abel presides over the 2026 Berkshire Hathaway annual meeting.
About Ajit Jain
At the 2026 Berkshire Hathaway annual meeting, Ajit Jain discussed his approach to running the insurance business, emphasizing a small team of long-tenured decision-makers and a compensation structure based on fixed salaries rather than complex incentive formulas. He said that insulating employees from market fluctuations allows for a long-term orientation and avoids chasing short-term trends. Jain expressed skepticism about the near-term potential of artificial intelligence in insurance, stating that while AI is useful as a productivity tool for routine tasks, he does not believe it will replace human judgment in pricing or settling claims anytime soon. Jain also addressed succession planning during the meeting. Berkshire Hathaway CEO Greg Abel noted that the board has a plan in place for Jain's potential departure and that Jain has built a deep team with the same values and underwriting discipline. Jain reiterated his view that compensation plans with complex formulas can be gamed, and that fixed salaries help maintain a culture focused on long-term performance.
Transcript (5 segments)
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Unknown0:00
This question is for Greg, but I think it's important that you take it while Ajit's on stage with you so he can answer some of it, too. It comes from Zachary Phelps from Medfield, Massachusetts, who writes, 'Ajit Jain has been described by Warren as irreplaceable. He's helped build one of the greatest insurance operations in history and has been the backbone of Berkshire's underwriting discipline. How are you thinking about succession planning for Ajit and the insurance business? And how do you ensure that the underwriting culture, the insurance moat is preserved in the next generation of leaders?' And Greg, I'll just add for compression's sake, I did get questions about your succession planning, too. So maybe you can add that in there.
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Greg Abel0:42
I don't know how I'm supposed to take that. No, both succession obviously, succession's an important topic and I'll come back to our board both relative to Ajit and I, and I touched on this earlier. I mean, Ajit joined Berkshire in 1986 and is the architect of our insurance business along with obviously Warren and input from Charlie. But we've created a franchise that's second to none and we couldn't be more proud of it. And as it was touched on, the culture and the discipline within it is exceptional. Now, I found it really interesting when Warren announced the transition last year, and Ajit will recall this, the very first thing that happened was we left that meeting, there's a lot going on, and Warren said, let's get the insurance managers together, our top five, along with Ajit and with Mark Hamburg, and let's sit down and talk about the business. Let's discuss the culture. And it was a remarkable opportunity for me to one, expand my knowledge base on the insurance side. I've obviously been working with Ajit for a number of years and had other board opportunities where I had a wide understanding of it, but then to spend time with Ajit and our team and have Warren's perspectives, it was great. And that was literally the first action Warren took. And what I could see within that group was a very deep group of management experience, insurance experience, and they absolutely had the same values and culture that Ajit has highlighted. Now, I think when it comes to culture, Ajit touched on it already, which is it is challenging to keep a culture where you maintain that discipline because as he said, inaction and telling people, you know, take a few months off when they're used to being active is not easy if they're that type of underwriter or selling product. So, that's the delicate balance. But when it comes to, we're fortunate he's got an exceptional group that works with him and then also operates a number of our critical subsidiaries. They're deep in both knowledge and talent. I would then also highlight our board takes the succession issues very seriously, both with Ajit and myself. We have a plan, they have a plan in place and they discuss it. So if Ajit were unable to perform in his role today or I was unable to perform, our board knows what action they would take. Ajit.
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Ajit Jain3:48
Yeah. So in terms of the culture and the underwriting orientation which is so critical, there are a few simple rules that I've followed over the years and it's come at a cost but I think net-net is still a positive. But let me just lay it out in terms of how I think about this issue. Firstly, we have a very small number of people who actually get involved in the decision-making. My top three lieutenants in my reinsurance operation, forgetting about companies that we acquire, we have been together for 35 plus years now and we've become friends. And the other thing to minimize any kind of competition among these people and stepping on each other's toes, we have a compensation plan that gives fixed salaries, fixed compensation to the individuals as opposed to having some complex formula that results in they get the upside and Berkshire gets the downside. I try and stay away from that as much as possible. Really a problem with all the compensation plans I've seen. Then the other thing that is important is people need to have experienced going through a tough time and the fact that it doesn't penalize them. We insulate them from the ups and downs of the marketplace so that they feel secure and they do the right thing. And yeah, so those are the elements that I think allow us to have a long-term orientation and not get sucked into the latest fashion of the day and just do stuff for the sake of doing it.
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Unknown5:49
Your compensation question is such a critical point.
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Ajit Jain5:53
Yeah. The compensation thing. Having seen all these programs over the years, I remember having mentioned to Warren at some point in time. I said, 'Warren, you give me a compensation plan, I'll game it. You'll not be able to figure it out for years down the road.' And that's the problem together with the fact that if the employees lose, they want to go back and renegotiate the plan, and if they win, they're happy to walk away with everything. So that's the big challenge.