GEICO: The Government Employees Insurance Company
Despite what the name might suggest, GEICO has never actually been a government entity. The Government Employees Insurance Company was founded in 1936 by Leo Godwin, who was a former employee of USAA (the United Services Automobile Association). When Godwin and his wife, Lillian, started their new company, they used the limited market approach (or niche market approach) that USAA utilized: they based their business model on the belief that as a group, federal employees would be more financially stable and a lower loss risk than the general population. They moved their fledgling company to the District of Columbia the following year, reasoning that they should probably be more successful if they operated in a location with the highest percentage of their target customers.
GEICO remained privately owned until it went public in 1964. The company began offering insurance policies to the general population in 1973. Rapid growth caused a major company setback in the mid 1970’s, during the time of a nationwide recession in the United States. Today, it would be fair to say that the company has recovered quite well. It ranks at about the third largest writer of private automobile insurance in the United States, its main competitors being State Farm and Allstate Insurance.
In 1996, the Government Employees Insurance Company ended its many years of being a publicly traded firm and became a wholly owned subsidiary of Berkshire Hathaway.
GEICO sells insurance policies in all fifty states plus the District of Columbia. Its insurance policy offerings include private, collector and commercial automobile, motorcycle, ATV, RV, boat, motor home, life, Personal Umbrella (PUP), homeowners, renters, collectibles, condo and mobile home. The company offers coverages and policy discounts comparable to the other major players in the insurance field.
One operating advantage that this company has enjoyed historically is their direct sales infrastructure. The GEICO Insurance Agency deals directly with current and potential policy holders via the telephone and internet, freeing up company capital that would otherwise be spent on field agents. This is presumably what allows them to make that well known claim: “fifteen minutes could save you fifteen percent”. Their customers can obtain an insurance quote, manage existing policies or even report a loss or claim via the official company website.
This particular insurer does enjoy a popular following due to its amusing advertising campaigns. The GEICO gecko (you either love or hate that little lizard) is one of the most recognized company mascots in US pop culture today. Even the cavemen featured in a series of GEICO commercials enjoyed the stardom of their own short-lived television sitcom; how many other insurance mascots can claim such fame?
Whether you are an investor, or shopping around for an automobile insurance policy, this seems to be a company to keep your eye on. Before you make a final decision about which company to purchase a policy from, make sure to get a quote from this one also. You might be pleasantly surprised.
If you have even worked for GEICO Insurance or had a policy with them, our readers would love to hear from you. What did you think about the company? What did you like or dislike about it. How was the customer service. Please share your insights or personal story with the rest of our insurance community. Just fill out the web-form below to get started. Thank you.
This article is written for informational purposes and is not intended to take the place of competent local legal counsel. The writer is not associated with this insurance company or any of its affiliates. This website does not endorse any specific automobile insurance company over another.
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