10 things every Berkshire shareholder needs to know about GEICO 2023

1. GEICO is one of Berkshire Hathaway’s largest subsidiaries

GEICO stands for Government Employees Insurance Company, and it was founded in 1936 by Leo and Lillian Goodwin. The company initially targeted federal employees and military personnel as its customers, but later expanded to serve the general public; GEICO history.

In 1996, Berkshire Hathaway acquired GEICO for $2.3 billion, and it has since become one of the company’s largest subsidiaries [NY Times ]. GEICO is a direct-to-consumer auto insurance company that provides coverage for more than 28 million vehicles owned by more than 18 million policyholders. GEICO has about 38 thousand employees across the United States, and operates in all 50 states and the District of Columbia.

GEICO is known for its catchy advertising campaigns featuring its mascot, the GEICO Gecko, as well as celebrities such as Martin Short, Ice-T, and Shaquille O’Neal. GEICO also sponsors various sports and entertainment events, such as the NCAA March Madness, the NFL, and the Academy Awards.

2. GEICO is the second-largest auto insurer in the United States

GEICO has achieved remarkable growth in the highly competitive auto insurance market. As of 2021, GEICO is the second-largest auto insurer in the United States, with a market share of approximately 13%. This means that one out of every eight drivers in the country is insured by GEICO. GEICO has been growing its market share steadily over the past decade and has surpassed Allstate as the second-largest auto insurer in the United States [ValuePenguin].

GEICO's success is driven by its low-cost structure, efficient operations, and customer loyalty. GEICO's motto is "15 minutes could save you 15% or more on car insurance", and it delivers on this promise by offering competitive rates and discounts to its customers. GEICO also provides excellent customer service and claims handling, which results in high customer satisfaction and retention rates. GEICO's goal is to be the number one choice for auto insurance in America.

3. GEICO has a strong financial rating

GEICO has consistently received high financial ratings from independent rating agencies such as A.M. Best and Standard & Poor's. A.M. Best has given GEICO an A++ (Superior) rating for financial strength. Standard & Poor's has given GEICO an AA+ (Very Strong) rating for financial strength. These ratings reflect GEICO's strong capitalization, profitability, and liquidity. GEICO's financial strength enables it to provide reliable and competitive insurance products to its customers.

However, GEICO's financial performance has been challenged by the adverse impacts of the COVID-19 pandemic and the rising costs of claims in recent years. In 2022, GEICO had a pre-tax underwriting loss of $1.88 billion, compared to a profit of $1.26 billion in 2021. The combined ratio, which measures the ratio of claims and expenses to premiums, increased from 96.7% in 2021 to 104.8% in 2022. The main drivers of the loss were the significant increases in average claims severities, primarily due to cost inflation in property and physical damage claims [GEICO 2022 results], [BRK-B summary]. GEICO has responded to these challenges by obtaining premium rate increases from certain states and reducing its advertising and employee-related costs. GEICO expects to return to underwriting profitability in 2023.

Despite the temporary setback, GEICO has shown a long-term track record of underwriting profit and market share growth. From 2000 to 2021, GEICO increased its premiums written from $8.1 billion to $37.6 billion, and its policies-in-force from 4.8 million to 19.5 million. GEICO also improved its combined ratio from 102.7% in 2000 to 96.7% in 2021. GEICO's market share increased from 5.6% in 2000 to 14.4% in 2021, making it the second-largest auto insurer in the United States . GEICO's financial performance demonstrates its ability to adapt to changing market conditions and customer needs.

4. GEICO offers a variety of insurance products

In addition to auto insurance, GEICO offers a variety of other insurance products such as homeowners insurance, renters insurance, and life insurance. GEICO also offers business insurance products such as general liability insurance and professional liability insurance.

GEICO has a wide range of insurance options for your coverage needs, whether you own or rent a home, a car, a boat, a motorcycle, or a business. GEICO also provides additional insurance products such as life, umbrella, travel, overseas, pet, and more. GEICO's insurance products are designed to fit your lifestyle and budget, and you can get a quote online or by phone anytime. GEICO also has a high-rated mobile app that lets you access your policy and claims easily.

5. GEICO has a strong online presence

GEICO has invested heavily in its online presence and offers customers a variety of online tools and resources. Customers can manage their policies online through the GEICO website or mobile app. They can view their coverage details, make payments, update their personal information, and more. Customers can also file claims online through the GEICO website or mobile app. They can report an accident, upload photos and documents, track the status of their claim, and communicate with their adjuster. GEICO's online presence makes it easy and convenient for customers to access their insurance services anytime and anywhere.

6. GEICO offers discounts for policyholders

One of the benefits of being a GEICO policyholder is that you can enjoy various discounts on your insurance premiums. GEICO offers discounts for safe drivers, good students, military personnel, federal employees, and more [GEICO Car Insurance Discounts].

You can also save money by bundling your auto insurance with other policies such as homeowners, renters, or life insurance. Additionally, you can receive discounts for being a member of certain organizations or professions that are affiliated with Berkshire Hathaway. These include Applied Underwriters, Berkshire Hathaway Specialty Insurance, GEICO - Associate Discount, and many others. By taking advantage of these discounts, you can lower your insurance costs and get more value for your money.

7. GEICO has a strong customer service reputation

GEICO has consistently received high marks for customer service from independent rating agencies such as J.D. Power. In J.D. Power’s 2021 U.S. Auto Insurance Study, GEICO ranked highest among large insurers for overall customer satisfaction [jdpower.com]. This means that GEICO customers are more likely to be satisfied with their interactions with the company, whether it is through phone, online, or in-person channels. GEICO also has a 24/7 customer service line that allows customers to reach a representative at any time of the day or night. GEICO strives to provide its customers with fast, fair, and friendly service at every touchpoint.

8. GEICO has a strong advertising presence

GEICO is known for its humorous advertising campaigns featuring its mascot, the GEICO Gecko, an anthropomorphic day gecko with a British accent. The company spends more than $1 billion annually on advertising, using various channels such as television, radio, online platforms and print media. GEICO's ads aim to highlight the savings and convenience that customers can enjoy by choosing GEICO as their insurer.

Some of the most popular and memorable ads include the "Unskippable" series, which won several awards for its creativity and effectiveness, and the "It's What You Do" series, which features humorous scenarios involving celebrities and fictional characters. GEICO's advertising strategy has helped it to increase its brand awareness and market share in the highly competitive U.S. auto insurance industry.

9. GEICO has a strong mobile app

GEICO's mobile app is one of the best in the industry and provides customers with convenience and peace of mind. The app allows customers to access and manage their policies, pay their bills, view their coverage details, and contact customer service. The app also enables customers to file and track claims, request roadside assistance, find nearby gas stations and repair shops, and access their digital ID cards. The app is available for free on both iOS and Android devices and has received positive reviews from users. GEICO's mobile app is a valuable tool for customers who want to stay connected and informed about their insurance needs.

10. GEICO is committed to giving back to the community

GEICO is not only a leader in the auto insurance industry, but also a responsible corporate citizen that cares about the well-being of its customers and society. Through its "GEICO Cares" program, the company supports various organizations and causes that focus on education, health and wellness, environmental conservation, and community enrichment. Some examples of GEICO's philanthropic efforts are:

• GEICO sponsors the GEICO Achievement Award Program, which recognizes outstanding college students who demonstrate academic excellence, leadership, and community service.
• GEICO partners with the American Red Cross to provide blood donations and disaster relief assistance.
• GEICO supports the Arbor Day Foundation to plant trees and promote environmental awareness.
• GEICO donates to the United Way to help improve the lives of people in need.
• GEICO contributes to the USO to support military service members and their families.

By giving back to the community, GEICO demonstrates its core values of integrity, respect, service, and excellence. As a Berkshire Hathaway shareholder, you can be proud of being part of a company that not only delivers value to its customers and shareholders, but also makes a positive difference in the world.