Definition
Insurance float describes temporary control of funds connected with future insurance payments. In Berkshire Hathaway’s definition, the measure approximately represents net policyholder funds created by insurance activity and available for investment. Its composition should be reconciled with the company’s disclosures rather than treated as a universal balance-sheet line.[1]
Economic price
If insurance operations are loss-making, these funds can have a positive financing value. If they are profitable, the result can be the opposite. Comparisons require the same period, average float and a separate result for insurance operations.
Common mistake
Do not equate a premium, float, cash balance and profit. These quantities have different definitions and timing. The ability to invest does not remove future payments, liquidity constraints or applicable regulation.
The educational valuation calculation and cash-requirement scenario are discussed in [insurance float as financing](/guides/insurance-float/). A definition from one foreign group does not establish a methodology for a Russian insurer or guarantee that owning its shares is advantageous.
Primary material
[1] Berkshire Hathaway, Annual Report 2025; definition of float and components in the insurance investments section.
[Berkshire Hathaway Annual Report 2025](https://berkshirehathaway.com/2025ar/2025ar.pdf)