University of California, Merced Marketing Evaluation "Fifteen minutes could save you 15% or more on car insurance" Angelina Turner ECON108: Marketing and Consumer Behavior Professor Shauna Bennett December 15th, 2022
Overview of Company Founded in 1936 by married couple, Leo and Lillian Goodwin, GEICO has celebrated 70+ years of offering various forms of insurance coverage to consumers. With business ideation that began in the mid 1930s, at the height of the Great Depression, the company's name acted as an acronym:GovernmentEmployeesInsuranceCompany. Although the corporation has since grown to offer their services to the general public, because of the pessimism and economic turmoil of the time, the corporation began by specifically targeting federal employees and certain categories of enlisted military officers as their customer base. After the first year of their establishment, GEICO had enacted a mere 3,700 insurance policies and employed 12 staff members. Beginning in 1948, however, the firm started to witness growth opportunities and a larger presence in the national market for insurance. Investment banker Lorimer Davidson was tasked with assisting the company in finding investors such as business professor Benjamin Graham, making a large influence on the growing success of the brand. This investor in particular, had academic ties with Warren Buffet, who began showing interest in the company and bought shares following a meeting in 1951 with Davidson. Subsequent to founder Leo Goodwin's retirement in 1958, Davidson was appointed successor and developed the business to pass the mark of 1 million policyholders by 1964. Throughout the 1970s, the company experienced difficult times after the respective deaths of co-founders, Leo and Lillian, resulting in a loss of reserves. Warren Buffet offered even more support during this time, executing his second purchase of GEICO stock totalling 1 million shares.
Later, in 1980, Davidson performed underwriting which brought further expansion of the company by introducing 24-hours-a-day, 365-days-a-year telephone servicing for claims, sales, and to provide higher quality customer service as usage and demand grew. Appointed in 1993, newly named chairman, president, and CEO Olza "Tony" Nicely, introduced a four-company strategy which largely increased the advertising budget growing nation visibility. By 1995, Warren Buffet's interest in the company had peaked, causing him to make a large bid on behalf of Berkshire Hathaway, to purchase the remaining shares of GEICO's outstanding stock, officially making GEICO a subsidiary of the sizable holding company. As of 2009, the firm was a nationwide company servicing all 50 states as well as the District of Columbia, also broadening their reach of operations to homeowners, renters, etc. The insurance agency was the first within the industry to adapt to mobile-friendly usage with the ability to request quotes and purchase policies from iPhone and Android apps in 2010. Between July of 2016 and June of 2017, GEICO reached monthly records for sales and growth and succeeded in acquiring over 17 million policyholders by 2019. Now known as the largest auto insurer in Connecticut, the District of Columbia, Florida, Hawaii, Maryland, New Hampshire, New Jersey, New York, and Virginia with 40,000+ associates spread throughout 17 major locations across the country, the corporation has upheld its core values of excellent coverage, low prices, and outstanding customer service. GEICO, "built on ingenuity, perseverance, innovation, resilience, and hard, honest work", declares their mission statement with a purpose, "to provide affordable and dependable direct auto insurance to drivers across the United States, while also representing our customers in their time of need following an accident." Their code of ethics follows 7 operating principles which are taught in employee training regiments, tested frequently, and are present within daily business activities. They are as follows: