There are a lot of people out there who should be familiar with the name of GEICO to some extent. After all, it has conducted a number of successful marketing campaigns over the course of its existence, which have made it very well-known to both its customer base and otherwise. This is on top of the fact that GEICO is a major player in the auto insurance market, so much so that it can claim the number two position in the United States. Here are 20 things that you may or may not have known about GEICO:
1. Stands for Government Employees Insurance Company
GEICO stands for Government Employees Insurance Company. However, while its full name can be rather misleading, GEICO isn’t owned by the government. Instead, the name of the company is a reflection of how it came into existence, which is similar to a lot of other cases in that it is no longer a perfect summary of its present operations.
2. Owned by Berkshire Hathaway
Currently, GEICO is a subsidiary, meaning that it is a company owned by another company. In its case, that company would be Berkshire Hathaway, which is another name that should be familiar to a lot of people out there. After all, Berkshire Hathaway is the holding company controlled by Warren Buffet, so it should come as no surprise to learn that it owns not just GEICO but also a number of other well-known names such as Dairy Queen and Fruit of the Loom. In the case of GEICO, it is wholly owned by Berkshire Hathaway and none other.
3. Founded by a Couple
GEICO was founded in 1936 by a married couple named Leo and Lillian Goodwin. Leo was in insurance, while Lillian was in bookkeeping. However, both of them went on to handle a wide range of responsibilities at the company that they had founded, not least because in the earliest times, establishing GEICO was something of an uphill struggle. For proof, look no further than the fact that they had to work 12 hours a day for either no pay or very little pay before they could get their project off of the ground.
4. Leo Goodwin Had Experience at USAA
Before starting up GEICO, Leo Goodwin had extensive experience at USAA. There, he worked as someone who provided insurance policies to military personnel. Moreover, he was good at it, which is how he managed to rise up its ranks until he had gone as far as he could have gone with its military-dominated hierarchy.
5. Founded to Provide Insurance to Government Employees
Given its name, it should come as no surprise to learn that GEICO was founded for the purpose of providing insurance policies to government employees and their families. In other words, its name actually described more or less exactly what it was supposed to be, which was rather useful to say the least.
6. The Choice of Government Employees Was Not a Coincidence
The Goodwins’ choice to focus on government employees was by no means a coincidence. In fact, it was very much influenced by Leo Goodwin’s time at USAA working with military personnel. Essentially, the Goodwins were under the belief that government employees would be a much less risky pool of clients than the general public, meaning that by catering to them, they could earn a profit without putting their operations at too much risk in the process. Considering how underestimating risk can cost insurance companies huge sums of money when they have to pay out too often, it isn’t difficult to see why the Goodwins chose a less risky pool of clients, particularly since their early years were fraught with difficulties that could have seen them go under.
7. Relocated to Washington, D.C. in 1937
Speaking of which, the Goodwins would eventually make the choice to relocate their operations from San Antonio in the state of Texas to Washington, D.C. in 1937. This was a perfectly logical choice. After all, they had decided to sell insurance policies to government employees. As a result, it made sense for them to base their operations in the place where they could expect to find the densest concentrations of government employees, who made for the richest markets for their particular services.
8. David Lloyd Kreeger Was Another Major Contributor
Of course, the Goodwins were not the only people who played important roles in building up GEICO. Another example of such individuals was David Lloyd Kreeger, who went on to hold a number of senior leadership positions at the corporation. In short, Kreeger was one of a number of people who bought into GEICO before it went public, with the result that he secured a fair amount of influence that presumably helped him become both CEO and Chairman of the corporation in time.
9. Kreeger Continued to Serve as Chairman Until 1979
For an idea of the influence that Kreeger had on GEICO, it is important to point out that he served as its Chairman until 1979. This is important because the Chairman is the one who leads the Board of Directors, who are supposed to represent the shareholders by choosing the executives who are in charge of the day-to-day operations of a corporation. Even then, Kreeger was recognized by the new title of Honorary Chairman, which was meant to signal that he had stepped down while still honoring his contributions to the corporation.
10. Kreeger Responsible for Insuring General Public
It is interesting to note that Kreeger was the one who pushed for the decision to have GEICO start insuring the members of the public instead of remain exclusive to government employees. This was an obvious choice. After all, there is a limited number of government employees in the United States, meaning that there is a limited market. Due to this, if GEICO ever wanted to become big enough to compete with the top names in the insurance market, it was going to have to open up to a wider pool of potential clients, which in turn, could support a much bigger set of operations. With that said, this decision was also propelled by the fact that GEICO had gained access to computerized driving records, which made things a lot easier.
11. Got Hit by 1973 to 1975 Recession
Unfortunately, GEICO was one of the companies hit by the 1973 to 1975 recession, which was notable for being a period of stagflation. For those who are unfamiliar with the term, stagflation is when an economy suffers from both high inflation and high unemployment. Suffice to say that such scenarios remain very problematic even in present times because the tools used to handle one problem tends to have a detrimental effect on the other. In Geico’s case, it was particularly hard-hit because it had expanded more than what it could sustain.
12. Had to Undergo Serious Reorganization
To get an idea of just how hard GEICO was hit by the 1973 to 1975 recession, it is important to note that it had to undergo a serious reorganization of its operations as well as other serious measures to survive the hit. Otherwise, it would have collapsed in those times instead of managing to make it to the modern day. Even then, GEICO saw significant shrinkage of its operations, which must have been particularly unpleasant because it had just become one of the biggest auto insurance companies in the whole of the United States.
13. Has Dabbled in Other Forms of Insurance
It is interesting to note that GEICO has dabbled in various kinds of insurance over the course of its existence. For example, there was a time when it sold homeowners insurance as well as auto insurance. However, those days are long gone because GEICO has made the strategic choice to focus on its core competencies rather than split its attention too many ways. With that said, it is interesting to note that GEICO still uses its sales infrastructure to market various insurance policies that are underwritten by other insurance companies rather than itself.
14. Had a Sister Company
At one point in time, GEICO had a sister company, which was called GELICO. Due to the name, it should come as no surprise to learn that GELICO stood for Government Employees Life Insurance Company. However, GEICO eventually gave up on GELICO as a part of its routine operations. Instead, it sold the company to Legal & General, which is a British multinational that specializes in a number of financial products that happen to include life insurance policies.
15. Very Popular with TNC Drivers
Currently, GEICO is very popular with TNC drivers, meaning people who drive for companies such as Uber and Lyft. Initially, GEICO wasn’t too enthusiastic about insuring said individuals. In fact, there were multiple cases of it either denying their claims or outright cancelling their insurance policies. However, GEICO eventually came around, with the result that it came up with ridesharing coverage in certain states with bigger populations that has actually managed to win praise from insurance experts because of its effectiveness in what it has set out to do.
16. Partners with Martin Agency for Marketing Campaigns
GEICO is famous for its marketing campaigns. This is unsurprising, seeing as how it is willing to spend huge amounts of money to make even more money. For example, GEICO spent a remarkable $1.1 billion in advertising in 2012, which represented 6.8 percent of its revenues for that particular year. Said spending has proven to be very profitable for the Martin Agency in Richmond, VA, which has been the one coming up with GEICO’s marketing campaigns for a very, very long time. With that said, the length of this particular association is unsurprising, seeing as how GEICO has gotten very good results out of them.
17. The GEICO Gecko Is a Gold Dust Day Gecko
The most famous GEICO mascot should be the GEICO gecko, which makes sense because it is a member of a very eye-catching species. In short, the GEICO gecko is recognizable as a gold dust day gecko, which is a species of diurnal geckos that live in the northern part of Madagascar as well as the island of Comoros, though it has been introduced to other places as well. Generally speaking, said geckos eat nectar as well as insects, but they are rather opportunistic in the sense that they won’t hesitate to chow down on smaller lizards if they find it convenient for them.
18. GEICO Cavemen Based on Perception of Cavemen Being Stupid
Another famous GEICO mascot would be the GEICO cavemen, who are based on the premise that GEICO’s services are so simple that even cavemen can make use of them. In turn, this is based on the perception that cavemen are stupid, which is somewhat unfair. After all, what distinguishes us from our cave-dwelling predecessors is the societal institutions that have been built up over the course of millennia, meaning that we are adapted for a very different environment than they were. If anything, there is a good chance that cavemen would have been a little bit smarter than us on average, mostly because our societal institutions have made stupid mistakes much more survivable for us than for our predecessors.
19. Uses Sports Sponsorships
Speaking of which, GEICO isn’t limited to running ads, as shown by how it loves its sports sponsorships. For example, it is a sponsor of the NHL with a particular focus on the Washington Capitals, which makes sense because the Capitals would be its hometown team. However, GEICO is also famous for its sponsorship of motorsports, which is something that it has been doing for years and years.
20. Has Been Sued Successfully
Unsurprisingly, GEICO has been sued by a wide range of entities for a wide range of reasons over the course of its existence. Often, these lawsuits have even been successful. For example, there was the time that a family was awarded damages from GEICO because a jury decided that GEICO had acted in bad faith. Likewise, there was the time that the Consumer Federation of California managed to sue GEICO for discrimination based on various factors such as occupation and level of education.