In my view, Buffett's business strategy has two components, which are all interlinked.
First, there is Buffett's desire to literally "get money for nothing" and then invest that free money for his own profit. A long time ago, he bought a company called "Blue Chip Stamps" whose scheme was to convince a bunch of retail stores to pool a certain amount of money together, give that pool of money to Buffett, and then those stores would distribute cheesy stamps to their customers that could be redeemed for merchandise that would be paid out of the pool of money now under Buffett's control. Well, it turned out only a certain percentage of customers turned in those cheesy stamps to get merchandise, so Buffett ended up with all that money -- totally cost- and interest-free. And what did he do with that money? He invested in stocks and made a profit for himself. In effect, he benefited from leverage but without the cost of leverage (interest). Insurance companies represent the same sort of deal to Buffett -- sources of cost-free funds which Buffett can then invest in the stock market. While Charlie Munger prefers S&L's as a source of funds, Buffett likes insurance companies because, while S&L's always have to pay interest for the deposits they receive from their customers, insurance companies need not pay anything for the right to play with their customers' money. To reduce claims, Buffett's insurance companies underwrite only those insurance policies with a low likelihood of ever being claimed. For instance, Buffett's Geico Auto Insurance company will only cover the safest of drivers. When you hear Geico commercials on the radio offering to quote you not only their but other insurance companies' rates (which might be lower than Geico's rates), Geico is not doing this as a favor to you but because it wants to avoid high-risk drivers, as well as maintain its profit margin. A focus on minimizing the likelihood of ever paying claims also explains Buffett's love of the reinsurance business. The probability that a reinsurance company will ever have to pay out claims is significantly reduced by the fact that all of its policies have already been screened or vetted once for risk by the primary insurance company, which is being insured in turn by the reinsurance company. In summary, Buffett views insurance companies merely as investment vehicles and, unlike most other insurance companies, he does not try to make money from the underwriting side of the insurance business (which often leads to unprofitable price wars), but focuses on merely preserving the profit margin the underwriting side provides, as profit margin is the source of "float."
Then, Buffett invests that float in stocks using his "intrinsic value/margin-of-safety" methodology. I won't go into that. It is enough to say that Buffett's modus operandi is a two-component system consisting of: 1) exploiting insurance companies for their "float" (essentially a huge interest-free loan) and 2)investing that float in companies like Coke and buying out companies like Dairy Queen, which have favorable, enduring prospects.