GEICO(Redirected from Geico)
The Government Employees Insurance Company (GEICO //) is an American auto insurance company with headquarters in Chevy Chase, Maryland. It is the second largest auto insurer in the United States, after State Farm. GEICO is a wholly owned subsidiary of Berkshire Hathaway that provides coverage for more than 24 million motor vehicles owned by more than 15 million policy holders as of 2017. GEICO writes private passenger automobile insurance in all 50 U.S. states and the District of Columbia. The insurance agency sells policies through local agents, called GEICO Field Representatives, 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 headquarters in Chevy Chase, Maryland
Fort Worth, Texas, United States
|Founders||Leo Goodwin Sr.
|Headquarters||Chevy Chase, Maryland, United States|
|Tony Nicely (CEO)|
|Revenue||$25.483 billion USD (2017) |
Number of employees
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 as an insurer who 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 compared 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, Kreeger was named chairman and chief executive officer. He retained those titles until he retired in 1975. Kreeger continued his role 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. At this time, GEICO 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 USD 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.
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.
After several years of denying claims and even canceling policies for policyholders that used their personal car for ridesharing companies such as Uber and Lyft, GEICO began offering rideshare coverage in select states in 2015, including in high-population states such as Texas, Pennsylvania, Ohio, and Georgia. The policy, which is issued through GEICO's commercial department, has received praise from insurance experts and quickly launched GEICO as the largest insurance provider for TNC drivers.
GEICO has many well-known ad campaigns. In 2012 GEICO spent over $1.1 billion USD in advertising, or 6.8% of its revenue. All campaigns are made and produced by The Martin Agency in Richmond, Virginia. GEICO ads have featured several well-known mascots, including:
- The GEICO Gecko is the most prevalent spokesperson mascot and speaks with a Cockney accent.
- The GEICO Cavemen (from ads claiming using their website is "so easy, a caveman could do it").
- Maxwell, the GEICO "Piggy" who shouts a long "Whee" and appears in more radio and TV commercials.
- Actor Mike McGlone, who uses film noir-style narration to compare the ease of GEICO to things, famous people, or idioms. ("Could switching to GEICO really save you 15% or more on car insurance?...Is having a snowball fight with pitching great Randy Johnson a bad idea?") The scene is then acted out, with typically humorous results. In addition to Johnson, other ads have included Charlie Daniels, Andrés Cantor, Foghorn Leghorn, Elmer Fudd, R. Lee Ermey, and Ed "Too Tall" Jones among others.
- The "money savers" campaign enlisted actors to portray average consumers who have resorted to various humorous extremes in order to save money, such as teaching a dog to sing or teaching a group of Guinea pigs to row a boat and perform some mundane task for the consumer, and then presented switching to GEICO as an easy alternative to such endeavors with the common line ".... there's an easier way to save money."
- The "Happier Than...." duo features Jimmy (actor Timothy Ryan Cole) and Ronnie (musician Alex Harvey) playing a guitar and a mandolin, respectively, on a small portable stage. They comment on a fictitious preceding event, such as a man dressed in 15th-century attire laughing as he leads a trio of speed boats with the painted names Nina, Pinta, and Santa Maria. After cutting to the duo, one says to the other, "You know, folks who save hundreds of dollars by switching to GEICO sure are happy." The other then replied, "How happy are they, (Jimmy/Ronnie)?" and in the case above, the response is "Happier than Christopher Columbus with speedboats!"
- Kash, the stack of cash that represents the money you could have saved by switching to GEICO.
There are also GEICO ads that feature stories from GEICO customers about situations in which the company assisted them, but are translated by celebrities like Little Richard and Joan Rivers. Film trailer announcer Don LaFontaine appeared in one such ad, shortly before his death. The tag announcer for these spots was D. C. Douglas. GEICO is also an official sponsor of the National Hockey League and themed commercials that always feature members of the hometown Washington Capitals.
GEICO has long been involved in motorsports sponsorships. Since 2008, the company has sponsored the Germain Racing team, first in the NASCAR Nationwide Series with Mike Wallace, and later in the NASCAR Sprint Cup Series with Max Papis and Casey Mears. Ty Dillon, grandson of racing legend Richard Childress, began driving the #13 GEICO Chevrolet in the 2017 season.
GEICO's major competitors include Amica Mutual Insurance, Liberty Mutual Insurance, State Farm, Allstate, 21st Century Insurance, Reliance Partners, Progressive, Nationwide Insurance, and United Services Automobile Association.
In December 2016, a federal Miami jury awarded $2.7 million USD to a family who sued the company, claiming the company acted in bad faith.
In November 2015, a jury in Miami awarded a family $14.5 million USD after suing the company for bad faith.
In October 2015, the Consumer Federation of California successfully sued the company for $6 million USD after alleged discrimination based on occupation, education level, and other personal characteristics.
In October 2015, the United States Court of Appeals for the 11th Circuit upheld a verdict against the company for over $700,000 USD in a breach of contract suit.
In 2013, Tony Dane of Las Vegas successfully sued GEICO for breach of contract following the theft of his car in which GEICO denied his claim, accused him of stealing his own vehicle, and put a private investigator on him. He feared he may have lost custody of his children. Dane's original attorney dropped him, so he pursued the case pro se and won, gaining a verdict from a jury.
In December 2010, the family of John Potts, a man who was killed in a traffic accident by a GEICO customer, successfully sued the company for $8.48 million USD after the company refused to pay an adequate settlement following the crash.
- "Where the iPhone, AWS, and Geico Would Rank". Fortune. June 2017. Retrieved March 12, 2018.
- Yerak, Becky (June 13, 2013). "Geico tops Allstate as nation's No. 2 auto insurer in 1Q". Chicago Tribune.
- GEICO History: An American Success Story. GEICO official site. Accessed 18 December 2009.
- "Leo Goodwin, Financier, Son of Founder of Geico". The Washington Post. January 18, 1978.
- Fowler, Glenn. "David Lloyd Kreeger Dead at 81; Insurance Official and Arts Patron". The New York Times. Retrieved 14 May 2015.
- Jones, William H. (June 8, 1978). "Investors May Get Geico Settlement". The Washington Post.
- "74. Geico (Berkshire Hathaway)". Forbes. Retrieved August 8, 2015.
- "Insurance Shopping Study (2016)", J.D. Power. April 29, 2016. Retrieved 25 jan 2017
- "GEICO Success Highlights Advertising Dollars vs. Agent Commissions Debate". Insurance Journal. October 22, 2013.
- "Lawyers Pursues Bad-Faith Claim After Geico Delay", Celia Ampel. Daily Business Review. December 22, 2016. Retrieved 9 jan 2017
- "Florida Couple Recovers $14.5 in Bad Faith Case Against Geico", National Trial Lawyers. Lawyers and Settlements. November 14, 2015. Retrieved 9 jan 2017
- "Geico agrees to $6-million settlement in discriminatory pricing case", Nick Shively. Los Angeles Times. August 24, 2015. Retrieved 9 jan 2017
- "Geico Loses 11th Circ. Rehearing Bid In Bad Faith Case", David Langhorne. Law 360. October 1, 2015. Retrieved 9 jan 2017
- "Real GEICO Customer Tony Dane Sues GEICO And Wins", Tony Dane. PR News Wire. February 6, 2013. Retrieved 9 jan 2017
- "GEICO’s $9.6 million-dollar lesson in “bad faith” ", D'Amore Law Group. November 6. Retrieved 9 jan 2017