In 1951, Warren Buffett, then a Columbia University graduate student under Benjamin Graham, interviewed Lorimer Davidson (then a VP) and named GEICO "The Security I Like Best." From 1948 to 1958, GEICO's market capitalization grew almost 50 times. Graham-Newman's investment in GEICO eventually resulted in a position worth $400 million by 1972, which was by far Graham-Newman's best investment and outperformed the rest of their portfolio combined. In 1948, the Rhea family sold its 75% stake of GEICO to a coalition of investors, which was led by Benjamin Graham's Graham-Newman Partnership taking 50% (worth $712,000 at the time) this sale accidentally violated a SEC regulation, which forced Graham-Newman to divest a portion of their holdings in 1949, resulting in GEICO becoming a publicly traded company at ~$27/sh. corporation after realizing that their business model would work best in the place with the highest concentration of federal employees. In 1937, the Goodwins relocated GEICO from San Antonio, Texas to Washington, D.C. Despite the presence of the word "government" in its name, GEICO has always been a private corporation not affiliated with any U.S.
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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. The Goodwins funded the creation of GEICO with $25,000 of their own money and $75,000 from Fort Worth, Texas-based banker Cleaves Rhea, with legal assistance from future GEICO CEO Lorimer Davidson. He decided to start his own company after rising as far as a civilian could go in USAA's military-dominated hierarchy. Since 1925, Goodwin had worked for USAA, an insurer who specialized in insuring only military personnel. and his wife Lillian Goodwin to provide auto insurance directly to federal government employees and their families. GEICO was founded in 1936 by Leo Goodwin Sr. GEICO manages the policies as the “insurance agent” and has a separate customer care team that handles the property and umbrella policies.ĭespite the presence of the word "government" in its name, GEICO has always been a private corporation not affiliated with any U.S. GEICO also offers property insurance, as well as umbrella coverage which GEICO sells, but the risk on the policies are transferred to third party companies. GEICO is well known in popular culture for its advertising, having made numerous commercials intended to entertain viewers. Its mascot is a gold dust day gecko with a Cockney accent, voiced by English actor Jake Wood. The insurance agency sells policies through local agents, called GEICO Field Representatives, over the phone directly to the consumer via licensed insurance agents, and through their website.
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GEICO writes private passenger automobile insurance in all 50 U.S. 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. It is the second largest auto insurer in the United States, after State Farm. The Government Employees Insurance Company ( GEICO / ˈ ɡ aɪ k oʊ/) is a private American auto insurance company with headquarters in Chevy Chase, Maryland.