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GEICO

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GEICO
Insurance Company

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An auto insurance company founded in 1936 and currently based in Chevy Chase, Maryland, United States. Formally known as the Government Employees Insurance Company, it was founded to sell insurance directly to government workers but expanded to the general public in 1974.

History

The following section is an excerpt from Wikipedia's GEICO page on 16 May 2017, text available via the Creative Commons Attribution-ShareAlike 3.0 Unported License.

The Government Employees Insurance Company (GEICO /ˈɡaɪkoʊ/) is an American auto insurance company headquartered in Chevy Chase, Maryland. It is the second largest auto insurer in the United States, after State Farm. It is a wholly owned subsidiary of Berkshire Hathaway that as of 2015 provided coverage for more than 22 million motor vehicles owned by more than 14 million policy holders. GEICO writes private passenger automobile insurance in all 50 U.S. states and the District of Columbia. GEICO sells its policies through local agents, called GEICO Field Representatives, and over the phone directly to the consumer, and through their website. Its mascot is a gold dust day gecko with a Cockney accent, voiced by English actor Jake Wood. GEICO is well known in popular culture for its advertising, having made a large number of commercials intended to entertain viewers.

GEICO was founded in 1936 by Leo Goodwin Sr. and his wife Lillian Goodwin to provide auto insurance directly to federal government employees and their families. Since 1925, Goodwin had worked for USAA, an insurer which specialized in insuring only military personnel; he decided to start his own company after rising as far as a civilian could go in USAA's military-dominated hierarchy. Based on Goodwin's experience at USAA, GEICO's original business model was predicated on the assumption that federal employees as a group would constitute a less risky and more financially stable pool of insureds, as opposed to the general public. Despite the presence of the word "government" in its name, GEICO has always been a private corporation not affiliated with any government organization.

In 1937, the Goodwins relocated GEICO from San Antonio, Texas to Washington, D.C. and reincorporated the company as a D.C. corporation after realizing that their business model would work best in the place with the highest concentration of federal employees.

An important figure in GEICO's history is David Lloyd Kreeger, who became president of the company in 1964 and helped steer it into a major insurance enterprise. In 1948, he formed a group of investors who bought into GEICO right before it went public that year. He became senior vice president and general counsel of the company. Six years after becoming president of GEICO in 1964, he was named chairman and chief executive officer. He retained those titles until he retired in 1975. He continued as chairman of the executive committee until 1979, when he was named honorary chairman.

In 1974, under Kreeger's leadership, GEICO began to insure the general public, after real-time access to computerized driving records became available throughout the United States, and it was briefly the fifth-largest U.S. auto insurer. By 1975, it was clear that GEICO had expanded far too rapidly (during the 1973–75 recession) when it reported a $126.5 million loss. To prevent GEICO from collapsing, a consortium of 45 insurance companies agreed to take over a quarter of its policies, and it was forced to issue a stock offering (thus diluting existing stockholders) to raise money to pay claims. It took five years (during which the company shrank significantly) and a massive reorganization to set GEICO on the path to recovery.

GEICO has also offered other types of insurance besides auto, including homeowner's insurance from 1962 to 1996. A sister company, the Government Employees Life Insurance Company (GELICO), offered life insurance from 1975 to 1985. Although GEICO has since focused on its core auto insurance competency (selling GELICO to Legal & General), it uses its established direct sales infrastructure to market homeowner's and other types of insurance underwritten by other companies.

In 1996, after many years as a publicly traded firm, GEICO became a wholly owned subsidiary of Berkshire Hathaway.

GEICO generally deals directly with consumers via telephone and internet; however, the local agent program has more than 150 offices countrywide. GEICO is now the second largest writer of private auto insurance in the United States.


Multimedia

12 December 2016
14-17203 Amy McDaniel v. GEICO
United States Court of Appeals for the Ninth Circuit
GEICO General Insurance Company appeals the district court's summary judgment in favor of Amy McDaniel, individually and as assignee of the Estate of Edward Murotani, in McDaniel's diversity insurance coverage action.
Download 14-17203 Amy McDaniel v. GEICO - 310KB - 31:07
29 August 2017
14-35700 Louise King v. GEICO Indemnity Company
United States Court of Appeals for the Ninth Circuit
GEICO Indemnity Company appeals the district court's judgment in favor of Louise King, individually and as personal representative of the estate of Timothy King, Louise's husband, in King's diversity insurance coverage action.
Download 14-35700 Louise King v. GEICO Indemnity Company - 291KB - 33:29


Article Index

DateArticleAuthor/Source
2 May 2003GEICO INSURANCE DRIVES NORTHCommercial Brokers, LLC
24 August 2006Free Child Seat Checks By Insurance CompanyJoe Thompson
3 March 2016“Ray Price Award” to Crown Best Engine Builder at 75th Daytona Bike WeekRay Price Harley-Davidson
15 August 2016GEICO Named Best Mobile Auto Insurance Solution Again; Key Lime Interactive Reports Industry Trends and InnovationsKey Lime Interactive




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