Is GEICO a good car insurance company?
The answer is basically ‘yes’ and in this article we are going to be exploring how GEICO insurance company grew to become the second largest car insurance company in the United States.
The Origin of GEICO
The Government Employees Insurance Company started out in 1936 by Leo Goodwin who was a former employee of USAA and his wife Lilian.
Leo Goodwin realized that federal employees, as a group, would constitute a less risky and more financially stable pool of policy holders compared to the general public and would make better than average drivers, with this assumption he started out GEICO auto insurance company. Despite the presence of the word “government” in its name, GEICO insurance company has always been a private corporation not affiliated with any U.S. government organization.
In seeking out a pool of good drivers, Goodwin targeted government employees as people who were likely to be responsible and to have a steady income. Since the largest pool of government employees in one place was in Washington, D.C, Goodwin and his wife, Lillian, moved to the city in 1937.
GEICO set up offices in the Investment Building, at 15th and K Streets in the northwest quadrant of the city. Once in Washington, Goodwin and his wife worked tirelessly to make their fledgling enterprise a success.
They labored 12 hours a day, 365 days a year, establishing principles to select good drivers and sending out direct mail solicitations to government employees and military personnel.
GEICO’s direct mail operations took the place of a sales force of insurance agents and helped to keep the company’s rates low. On weekends, Goodwin went out to local military bases and personally solicited customers, or hand-wrote responses to customer inquiries and complaints.
At the end of the company’s first year in business, GEICO had written $104,000 worth of premiums and by 1940, GEICO posted an underwriting gain of $5,000 and a profit of $15,000. From then onward, the company kept growing.
What Insurance Does GEICO Offer?
GEICO insurance company offers an array of insurance services, here’s a drop-down list of all their insurance services:
- Property insurance (which include home, renters, condo, flood, landlord and mobile home)
- Business insurance (which include business owners, general liability, professional liability, workers compensation, commercial auto and rideshare)
- Additional insurance (which include umbrella, life, travel, overseas, identity protection, pet, and jewelry)
- Vehicular insurance (which include auto, motorcycle and RV, boat, collector auto, rideshare and Mexico auto).
GEICO under Berkshire Hathaway
In 1995, Warren Buffet announced his decision to fully purchase the shares of the company bringing it under Berkshire Hathaway, after the purchase GEICO insurance company kept growing consistently.
Berkshire Hathaway has a number of subsidiaries in the insurance industry, GEICO under Berkshire Hathaway kept specializing in auto insurance, GEICO generally deals directly with consumers via telephone and internet; however, the local agent program has more than 150 offices across the United States. GEICO is now the second-largest writer of private auto insurance in the country.
In 2010, GEICO insurance provided mobile users with a first in the insurance industry—the ability to quote and buy a policy from mobile-friendly pages on their iPhone and Android mobile devices.
Growth continued in 2012 as a new milestone of 11 million GEICO policyholders was reached early in the year, and the company would add another 3 million over the next four years and become the nation’s second-largest auto insurer.
And then things really took off! For 12 consecutive months, from July 2016 through June 2017, GEICO set monthly records for sales and growth, adding its 15 millionth and 16 millionth policies during 2017, and its 17 millionth early in 2019.
In 2017 GEICO made a revenue of $25.483 billion USD, Bill Roberts sit as its CEO.