Berkshire Hathaway's insurance business boosts first-quarter profit, bringing cash close to $200 billion.

• Berkshire Hathaway's Class A shares rose by 1.1% in premarket trading Monday after the conglomerate reported a surge in operating earnings and a record cash hoard. Meanwhile, Class B shares gained about 0.6%.
• This year, Berkshire Hathaway shares have surpassed the S&P 500's performance, with each share class achieving over 10% growth.

On Monday, Berkshire Hathaway shares increased in premarket trading after the conglomerate reported a rise in operating earnings and a record cash reserve.

In the premarket, Berkshire's shares rose by 1.5%, while shares increased by approximately 1.2%.

Berkshire Hathaway reported a 39% increase in first-quarter operating profit to $11.22 billion, primarily due to higher insurance underwriting earnings. This increase reflects the overall performance of all Berkshire's businesses.

The insurance industry's growth is driven by increased demand and pricing power, with Geico being a standout performer. Insurance underwriting earnings surged to $2.598 billion, up 185% from $911 million in the previous quarter. Geico's earnings also rose by 174%, from $703 million to $1.928 billion.

In the first quarter, Berkshire's cash hoard reached a record $188.99 billion, an increase of $21.3 billion from the previous quarter.

"Buffett stated at the annual shareholder meeting that our insurance underwriting earnings had improved significantly, and our investment income was likely to increase. He mentioned in the annual report that yields were much higher than the previous year, and we had many short-term investments that were highly sensitive to changes in interest rates."

This year, Berkshire Hathaway shares have surpassed the S&P 500's performance, with each share class achieving over 10% growth.

In March, Class A shares reached an all-time closing high of $634,440, but closed at $603,000 on Friday. Meanwhile, Class B shares were last priced at about $400 a share, which is about 5% below its record close of $420.52, also set in March.

Despite the positive outlook of Wall Street analysts, UBS analyst Brian Meredith has a buy rating on Berkshire Hathaway. He cites the earnings beat and notes that Geico is on track to surpass competitors in data analytics by 2025. Meredith has raised his price target from $722,234 to $734,820, which is 17% above the closing share price on Friday.

James Shanahan, an analyst at Edward Jones, has a hold rating on Berkshire. Despite this, he anticipates "solid earnings from BRK's diverse group of operating companies."