If you like most people, you've driven by properties and seen a sign out front that said the property was being offered for sale, on behalf of Berkshire Hathaway. There's just as good of a chance that you've heard about the company several times on the news or through social media. That being said, a lot of people really don't know what the company is all about, nor are they entirely clear on what they do. If you've always wondered what Berkshire Hathaway was all about and even what types of companies compete with them, you've come to the right place. You can find all of that out and learn which 10 companies are their biggest competitors.
Who is Berkshire Hathaway?
As it turns out, Berkshire Hathaway is a company that specializes in a lot of different areas. Some would say they dabble in a number of different things, but that would imply that the company doesn't really know what they're doing. Clearly, that isn't the case. The company was founded in 1839 and continues to be a force to be reckoned with, to this day. Technically, they are a holding company based in Omaha, Nebraska. In reality, they're involved in everything from real estate development to investments, insurance, manufacturing and retail.
If that's not enough to get your attention, they also have a hand in things like energy distribution, rail transportation and manufacturing. You might think that this would dramatically reduce the number of companies that are direct competitors. After all, it's uncommon that you find a company which is well-versed in so many different areas. The reality of the situation is that there are more than a handful of companies that can give them a run for their money. Below are 10 of their biggest competitors, largely because they're so similar to Berkshire Hathaway.
When you stop and think about it, it's rather astonishing how similar Markel and Berkshire Hathaway really are. They're both holding companies and they both specialize in various areas of the financial sector. In Markel’s specific case, the company chooses to hone in on matters related to insurance. For many cases, they reissue policies to individuals and companies who have had their insurance canceled for one reason or another. In short, they have a tendency to accept high-risk clients in the sense that they're willing to insure customers for significant amounts of money when other companies may not be willing to touch them with a ten-foot pole. They're not only similar to Berkshire Hathaway, but also a major competitor of the company.
In addition to their work with various insurance policies, they also serve as a holding company for major investments on a global scale. Again, this puts them directly in competition with Berkshire Hathaway. This particular company hasn't been around quite as long as Berkshire Hathaway, but they've definitely got longevity on their side, having been founded in 1930. The company is currently based in Glen Allen, Virginia. They have more than 17,000 employees around the globe. As of last year, their revenue was an astonishing $12.85 billion.
9. Arch Capital Group
Here you have a company that is much smaller and far newer than Berkshire Hathaway, yet they have managed to remain successful competitors with the company since very early on in their existence. The company was only founded in 1995. Since that time, they have definitely made a name for themselves as one of the foremost corporations in the world that writes insurance policies in high-risk situations. The truth of the matter is that they are considered specialists when writing insurance policies in areas that would make most insurance companies turn and run as fast as they can.
In addition, they write these insurance policies for customers all over the world. This includes both mortgage insurance and other special types of insurance that traditionally would only be handled by companies like Berkshire Hathaway. While they aren't involved with as many other areas such as real estate or manufacturing, they have definitely made a name for themselves in the insurance sector, so much so that even Berkshire Hathaway has taken notice.
Many people think it's interesting that while the company is technically based in the United States, it's actually located in Bermuda. There might be some interesting tax implications there, but the company is definitely one that knows its business when it comes to writing various types of insurance policies. There is little doubt that the location of its physical headquarters included just as much forethought as everything else this company does.
At the moment, they only have about 4,500 employees, much less than their competition. In 2019, the last time such information was reported for the company, the revenue stood at $6.89 billion. That might be a far cry from Berkshire Hathaway, but they are definitely a company on the rise. Considering the fact that they've only been in the business for a relatively short time (when compared to other companies of a similar nature), their performance is actually quite impressive.
8. W.R. Berkley Corporation
This is another holding company that has really made a name for itself in the insurance industry. That's largely because they have a tendency to issue rather large policies on both personal and property insurance. More often than not, the policies also involve high-risk issues that require special policies to be written. The company also deals with casualty insurance policies, something that they have been involved with since their founding in 1967. It's interesting to note that the company was first organized in Delaware. Almost immediately thereafter, its physical headquarters was moved to Greenwich, Connecticut.
The company has just over 7,400 employees. While their revenue is nothing compared to Berkshire Hathaway's, they are quite similar to the company in the way that they are structured and how they operate. In addition, the revenue is quite competitive with many of the other companies listed herein. As of 2018, it was listed at $7.691 billion. While it might seem like Berkshire Hathaway has a monopoly over the company, many stock market analysts actually believe that this is a company that is capable of directly competing with them for many years to come.
Allstate is one of those companies that practically everyone has heard of. While some of the other companies are similar to Berkshire Hathaway, they may not be as readily recognized by the public. Allstate is different in that sense because they have a tendency to compete more in the mainstream market as opposed to only specializing in high-risk insurance policies and the like. Like many of the other companies already listed, they've been in business for quite some time. In this particular case, the company was founded in 1931.
Without a doubt, it has been a constant ever since. They mainly operate in a similar fashion to Berkshire Hathaway in the sense that they offer insurance policies for all types of mainstream insurance, typically things involving casualty and property insurance. One of the things that typically sets them apart from much of the other competition is their history. When they were first formed in the 1930s they were actually part of the now-defunct Sears and Roebuck Company. It wasn't until 1993 that the company was partially allowed to come into its own, although Sears and Roebuck still owned the majority of the corporation. Finally, two years later the company was completely separated and now stands alone, just as it has done for the last 27 years.
It is definitely worth noting that this is a fairly large company, with more than 45,000 employees. Last year, their revenue was more than $44 billion. All of these factors combine in order to create a company that is often believed to most closely resemble Berkshire Hathaway in both the way they operate and in the amount of revenue they are capable of generating on an annual basis.
6. Travelers Companies
Founded in 1853, Travelers specializes in insurance. As a matter of fact, they have become specialists in this area to the point that they almost have a monopoly on it. If it weren't for the existence of Berkshire Hathaway, then they would almost certainly have a full-blown monopoly in this particular area, as they are second only to Berkshire Hathaway in commercial casualty insurance policies issued in the United States. Furthermore, they also write insurance policies for personal needs throughout the country. At the moment, they are the sixth largest company to do so.
The company is currently based in St Paul, Minnesota with a current stock price of $156.08 per share. Granted, that's about a tenth of what it will cost you to purchase a share of Berkshire Hathaway stock. Nevertheless, the company is easily one of their biggest competitors. That has been the case for years and there is absolutely nothing to indicate that this will change any time in the foreseeable future.
This is another insurance company that is a direct competitor to Berkshire Hathaway in that particular market. They were founded in 1937 and they have definitely cornered the auto insurance policy market in the United States. The company currently writes more policies of this type than any other company in the country. Currently, they are also the third largest insurance company in the world , behind Berkshire Hathaway and Travelers.
4. Invesco QQQ Trust
Here you have a company that is quite similar to Berkshire Hathaway and also a direct competitor, but not in the insurance market. Instead, they deal directly with the stock market. More specifically, they track the top 100 companies that are currently being traded on NASDAQ and work on their customers’ behalf to help them invest in these companies. They also simultaneously keep consumers updated about their performance on a daily basis.
You might think of them as something of a financial advisor that also predicts trends in the stock market based on what is currently happening. As such, they typically help their customers invest in some particularly high risk stocks, all in the hopes of helping them achieve financial freedom when they finally land on that one stock that outperforms virtually every expectation. How are they directly similar to Berkshire Hathaway? Both companies work on behalf of consumers within the stock market. The difference is that Invesco specializes in this particular arena while Berkshire Hathaway is more diversified.
3. Wells Fargo
Remember how Berkshire Hathaway deals with both personal and commercial finances? So too is Wells Fargo, and in a major way. The truth of the matter is that they are one of the oldest financial institutions in the United States, having been founded in the 1800s. Today, they operate a number of financial institutions while simultaneously making themselves available to clients who wish to open an account with them. More importantly, they also work to help their clients secure both personal and business loans, financing things that are worth tens of thousands of dollars. In some cases, they also advise clients on certain aspects of wealth, including investing in the stock market. Much like Berkshire Hathaway, they are based here in the United States, but they do business on a global scale.
2. Bank of America
When most people hear of Bank of America, they think of the financial institution where they or someone they know has an account. However, there is much more to the way this company operates. In reality, they are a multinational holding company that deals with virtually every aspect of the financial sector. In that way, they are very similar to Berkshire Hathaway. They're also one of the company's biggest competitors. As of last year, their revenue was an astonishing $3.169 trillion.
1. JPMorgan Chase
Founded in its current form as recently as 2000, this company is easily one of the most similar to Berkshire Hathaway. Just as easily, they are often considered the company's biggest competitor. They are a financial holding company that also serves as an investment bank for both personal and commercial operations. The company operates on a global scale and also dabbles in real estate, just like Berkshire Hathaway. Despite the fact that they haven't been around nearly as long as the competition, they've made a serious name for themselves by growing quickly and becoming a formidable competitor in the areas in which they specialize.
Written by Allen Lee
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