Geico Competitor Analysis

The company I’ve chosen to analyze for my Career Quest Alternate Assignment is Geico. Geico is a world leading insurance company that many know for their funny commercials featuring a gecko, as well as their famous slogan, “15 minutes could save you 15% or more on car insurance.” Geico was founded in 1936 by Leo Goodwin, and stands for Government Employees Insurance Company. Geico currently insures more than 22 million vehicles today, as well as 13 million auto policies and growing. In 1996, GEICO became a wholly owned subsidiary of Berkshire Hathway, headed by Warren Buffett, one of the country's most successful investors. Geico is headquartered in Chevy Chase, Maryland. Car insurance isn’t the only thing Geico offers, others includes ATV,

This business model was laughed at in the early years, but I think Geico is having the last laugh as we speak, top in at a net worth of 4.6 billion. There business model has a main key element of selling insurance directly to the customer. This business model has driven down operation costs, which they return to there policyholders by offering the lowest insurance rates on the market. Direct marketing to customers is what puts Geico ahead of competitors, as it creates a solid customer relation and builds trust between the company and consumer. Overall, the business model implemented is making Geico money, helping them become the top insurance provider in the United States as they just passed up Allstate recently in quarterly profits, at $4.68 billion for Geico and $4.4 billion for Allstate. Tim Calkins explains: “Geico is a perfect example of why positioning matters. Why buy from Geico? To save money. This is the core of the brand. Geico is a reputable company with low rates. Geico doesn’t promise the best service or the most complete coverage. It promises low rates.” This is a clear representation of their business model and how it translates to how consumers look at Geico as a whole. In the end, we are provided with more than enough evidence on Geico and how they have grown the company to an exceptional amount of profit, great for shareholders and investors, as well as providing customers with the best

Companywide, revenue climbed last year 3.2% to $51.4 billion, with $5.4 billion from Burlington Northern, a railroad Buffett bought in 2010. Profit at the business increase 4% to $963 million as the company invested billions in line expansion, new equipment and more employees to meet demands. People were worried when Geico’s profits plummeted in 2012 to $700 Million, but they raised to $1.5 Billion in 2013 and $1.8 Billion in 2014, continuing to go up. As far as annual revenue, Geico’s revenue has done nothing but rise since 1998 at $5 Billion, with 2014 being at $22 Billion, these all being pre-tax revenue. Profit and Revenue are solely products of the business model and its overwhelming success with the company, as you can see the clear upward trend in the graph to the left. Overall, Geico has shown huge upside potential through business these past couple years. Profits are projected to continue rising as Geico policyholders continue to grow through the upcoming quarters. We are excited to see what Geico has to offer in the years to come, as well as how their legendary business model continues to play out for them and give them more than exceptional