Warren Buffett calls insurance Berkshire Hathaway's most important sector

Berkshire makes steady amount of money (float and profit) from insurance business. They have always cheap money to invest, even in bad times when money is expensive.

When there is downturn and buying opportunities arise, other investors must sell something good, arrange expensive financing, or dilute their stock to buy something new. Buffet just buys.

The real shark was Musk, who was just mad that he wasn't able to force consumers to buy solar at more than twice the cost of other energy to subsidize his solar business, like he got the poor taxpayers of Nevada to subsidize his factory.

Most insurers write unprofitable policies and use float interest to cover those losses and make a profit. When they have a bad year, they often lose horrendous amounts and can be forced to raise more funding at unattractive rates just to stay in business.

And the value of float seems to be over-rated on this site. Float almost never can be invested in the stock market or other high yield aggressive investments. Because it represents policyholder's premium dollars it has to be invested very conservatively, usually in safe fixed income investments. The way Buffett uses it adds a nice bump to earnings, but it's far from a key to his success. He never owned any insurance companies when he had his highest return decades.

Before purchasing GEICO, Buffett averaged a 40% annualized return in his investment partnerships over 13 years, then averaged a 25% annualized return in Berkshire Hathaway for two and half decades. He was already the greatest investor in history before buying GEICO, and since purchasing it Berkshire Hathaway returns have dropped significantly (though not because of GEICO). GEICO has had only a small part to do with Berkshire's success, in fact it's a small portion of their insurance companies, which include General Re.

Float can be negative. In fact, the vast majority of insurers carry negative float, they lose money on the policies they write and squeeze out profits only with the interest they earn on float. Buffett's use of float is only successful because Berkshire is incredibly disciplined and doesn't own any insurance business without demanding it produce an underwriting profit.

Lastly, GEICO's float is probably the least useful float of all their insurance companies. Float's value is in proportion to the insurance contract duration, auto insurance is a short term contract and the float has to be returned quickly, greatly restricting the types of investments that can be made with it. Ajit Jain's group writes insurance contracts that have durations up to decades long, and that float can be invested much more aggressively.