Since its beginning, the goal of Government Employees Insurance Company (GEICO) has been to provide low-cost, high-quality insurance. GEICO pioneered selling directly to its customers, which allows GEICO to keep its costs down and its policyholders' premiums low.
GEICO's founder, Leo Goodwin, went into business by marketing directly to a target customer group whom he considered a good risk - government employees - and he did not employ insurance agents to do the job.
His idea of selling insurance directly to consumers, rather than through agents, defied the conventional wisdom of his time. Goodwin succeeded in driving down operating costs and passed on the savings to policyholders in the form of low rates.
Leo Goodwin's business model of direct marketing to targeted customers is a practice GEICO continues to this day. Of course, the Internet and telephone have replaced the mail-based system, but the idea is essentially the same.
In addition to cost savings, the direct approach was soon to be viewed as a valuable service feature by GEICO's customers. GEICO expanded its service to 24 hours a day, seven days a week, first on the phone and then on the Internet. The ability to reach an insurance professional 24/7, rather than being limited to an agent's office hours, was viewed as a distinct advantage over other companies. GEICO customers can purchase a policy, make policy changes, or file a claim anytime.
GEICO's direct marketing approach continues to be successful and GEICO continues to find ways to manage its business costs in order to offer savings to customers. In fact, according to A.M. Best Company, leading independent analysts of the insurance industry, GEICO is the fourth-largest insurer of private passenger automobiles and the largest direct marketer of car insurance in the U.S.
Today, GEICO and its affiliate companies - GEICO General Insurance Company, GEICO Indemnity Company, GEICO Casualty Company - provide auto, homeowner, and other types of property insurance to over 10 million customers in all states (excluding Massachusetts) and the District of Columbia.
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