Geico, the auto insurer owned by Berkshire Hathaway, on Monday named Todd Combs as its chief executive officer, expanding the role of one of Warren Buffett’s portfolio managers, who is widely seen as a potential Buffett successor.
Combs, 48, will take over on Jan. 1, 2020, replacing Bill Roberts, a 35-year Geico veteran who became CEO in June 2018 and will remain vice chairman.
Roberts told Tony Nicely, Geico’s executive chairman and his predecessor as CEO, in early November that he was turning 70 and planned to retire at the end of 2020, Nicely said.
Geico is the second-largest U.S. auto insurer, with about 40,000 employees. It said Combs will continue managing $14 billion of investments at Berkshire, the Omaha, Nebraska-based conglomerate he joined in 2010.
“That’s an awful lot of work for one person,” said Meyer Shields, a Keefe, Bruyette & Woods analyst with a “market perform” rating on Berkshire.
“Warren Buffett has talked about the overlap between being a good investor and a good businessperson,” Shields said. “This puts that into action, letting Combs broaden his operational expertise.”
Combs, who once worked at Progressive Insurance, is also a JPMorgan Chase director and helped launch Haven, a project between Berkshire, JPMorgan, and Amazon.com to reduce their employees’ health-care costs.
Many investors consider Combs and Berkshire portfolio manager Ted Weschler top candidates to succeed Buffett, 89, as Berkshire’s chief investment officer.
The billionaire credited both at Berkshire’s annual meeting in May with finding investments he might not otherwise hear about.
Berkshire and Geico did not immediately respond to requests for comment.
Combs is nine years younger than Berkshire Vice Chairman Greg Abel, widely considered a top candidate to become Berkshire’s CEO.
“Buffett has a lot of confidence in Todd Combs, but Geico is a very important franchise for Berkshire and I am somewhat surprised that someone with more experience wasn’t tapped,” said James Shanahan, an Edward Jones & Co analyst with a “buy” rating on Berkshire. “It appears he’s being groomed to do more.”
Buffett began investing in Geico in 1951, when he plowed more than half his net worth into the insurer.
Berkshire took full control of Geico in 1996, paying $2.3 billion for the 49% it did not already own.
Roberts joined Geico in 1984 in its marketing department. He was a key driver of its humorous advertisements, some featuring a talking gecko. Rivals such as Allstate, Liberty Mutual, and Progressive now also use humor in ads.