A surprise end of year promotion for one of Warren Buffett’s senior executives that has renewed speculation about the succession plant for the 89-year-old business legend.
On Monday Berkshire Hathaway named Todd Combs, one of Warren Buffett’s two main portfolio managers, as CEO of car insurer, Geico, handing him new responsibilities and raising him in the list of candidates to succeed the legendary Buffett.
48-year-old Combs takes over as Geico CEO on January 1, replacing Bill Roberts, who became CEO in June 2018. Roberts will become a Geico vice chairman and will retire at the end of next year.
Geico is America’s second-biggest car insurer and it is also one of Warren Buffett’s prize businesses, so its management will always be entrusted to a key, entrusted executive.
On top of managing Geico and its 40,000 employees, Combs will continue managing $US14 billion of investments at Berkshire, where he started in 2010. Coombs is one of two portfolio managers at Berkshire – the other is Ted Weschler who started at the same time.
Combs once worked at Progressive Insurance. He is also a JPMorgan Chase & Co-director (Berkshire is a big JPMorgan shareholder) and helped launch Haven, the health insurance project, Berkshire, JPMorgan and Amazon started to reduce their employees’ healthcare costs.
Berkshire veteran, Berkshire Vice Chairman Greg Abel is widely considered the top candidate to succeed Buffett as Berkshire’s CEO. Abel is 9 years older than Coombs. Abel has also been vice-chairman of Berkshire’s non-insurance businesses since the start of 2018 and is also chairman of Berkshire Energy.
The legendary Ajit Jain oversees all of Berkshire’s insurance businesses. He and Abel were promoted to the vice-chairman role at the start of 2018.
Geico though has special significance at Berkshire and for Buffett. It is one of Buffett’s oldest investments, dating from 1951 when he started building a stake, spending more than half is then fortune to take a controlling stake.
Berkshire took full control of Geico in 1996, paying $US2.3 billion for the 49% it did not already own. Since then it has become America’s second-largest car insurer behind State Farm.
US analysts will now wait to see if Todd Weschler is given a similar position at another big Berkshire business.
