Warren Buffett’s Berkshire Hathaway reported a significant boost in its fourth-quarter earnings for 2024, largely due to the performance of its insurance sector, resulting in the conglomerate’s cash holdings reaching unprecedented levels.

On Saturday, it was announced that the profit derived from the company’s wholly owned businesses, also known as its operating profit, saw an impressive 71% surge to $14.527 billion in the last quarter of 2024. A large part of this increase can be attributed to the insurance underwriting sector, which soared by an impressive 302% compared to the same period in the prior year, reaching $3.409 billion. The income from insurance investment also grew by approximately 50%, totaling $4.088 billion.

Furthermore, Berkshire Hathaway’s operating earnings for the entire year also saw a significant increase of 27%, totalling $47.437 billion.

Buffett, the chairman and CEO of Berkshire, mentioned in his annual letter to shareholders that the company performed better than he had anticipated in 2024, despite 53% of the 189 operating businesses reporting a decline in earnings. He attributed the gains to a predictable surge in investment income due to improving Treasury Bill yields and a significant increase in holdings of these highly-liquid short-term securities.

However, the company also cautioned investors about the potential impact of the Southern California wildfires, which are expected to result in an estimated pre-tax loss of approximately $1.3 billion for its insurance sector.

By the end of 2024, Berkshire Hathaway had amassed an enormous cash reserve of $334.2 billion, up from $325.2 billion at the end of the third quarter. This increase comes as Buffett continues to search for his next significant investment opportunity.

Despite some commentators expressing concern over the company’s large cash reserve, Buffett defended the position in his annual letter. He assured shareholders that a substantial majority of their money will continue to be deployed in equities.

Investment gains, however, experienced a slowdown in the fourth quarter, reducing to $5.167 billion from $29.093 billion in the same period the previous year. Notably, Berkshire Hathaway reduced its stake in Apple throughout 2024.

The company’s total earnings for the quarter were $19.694 billion, a decrease of 47% from the same period the previous year, which saw earnings of $37.574 billion. For the entire year, the net earnings were $88.995 billion, a 7.5% decrease from 2023’s total of $96.223 billion.