How is the insurance business great, Irmy? The ROE sucks! It's one of the reasons why the vaunted price-to-book ratio has fallen over the past several years. And the biz is not going to get any better soon -- rates in the insurance and reinsurance markets are not moving high enough yet to produce the kinds of returns investors need.
1. Good underwriting: If the underwriting allows the claims to equal the premiums paid, then the company gets an interest free loan... this is the normal goal of an insurance company, as they then make money on the invested 'float'. It can even be good if there is a small underwriting loss (a low interest loan, in effect). Berkshire often experiences an underwriting PROFIT (effectively, they are being paid to hold onto the money... money, or 'float' that is then invested purely for Berkshire's benefit).
2. Good investments of the float: While he does not control the entire portfolio, it is difficult to imagine a better guy in charge of investing our money than Warren Buffett.