The name GEICO originated in 1936, when the business was founded by Leo Goodwin. GEICO insurance was originally developed to target mainly military and government personnel. Leo Goodwin began his insurance business with the belief that he could offer vehicle insurance at lower rates by marketing his business straight to prime customer groups. In order to offer the lowest possible rates, Goodwin managed to keep the company’s operating costs low, thereby passing on the savings as up front discounts to policyholders. Today, GEICO still keeps their business costs low so that they can pass on discounts to their clientele.
Berkshire Hathaway took on GEICO as a subsidiary in 1996. Warren Buffet, head of Berkshire Hathaway, has become one of the nation’s most successful investors. Fortune Magazine has named Berkshire Hathaway’s property-casualty insurance operation the most admired in the United States for two years in a row.
Since the founding of GEICO in 1936, the company has served the United States Military as best as possible with many special programs. Military customers can get special rates, discount options and more with GEICO insurance while serving the country during wartime and peacetime. These special rates routinely bring in more customers for GEICO.
GEICO offers more than just vehicle insurance. Motorcycle, boat, home, apartment and mobile home insurance can be purchased though the company, as can personal umbrella protection.
GEICO Advertising and the GEICO Mascots
GEICO does their advertising in a variety of ways, including print, radio ads and television parody advertisements. Their print ads are comprised mainly of mail circulars. GEICO’s famous catch-phrase is “fifteen minutes could save you fifteen percent or more on car insurance”.
Some of the first GEICO insurance ads were animated and were of people doing crazy and dangerous things, like pressing a button that would result in a cannon firing at them. “We all do stupid things. Paying too much for car insurance shouldn’t be one of them,” was then heard via a voice-over. These commercials were short, and were aired by showing two commercials back-to-back but with different parodies.
GEICO became even more popular with the introduction of their reptilian mascot. The GEICO gecko is a talking Day Gecko that was created by The Martin Agency and first appeared in 1999 during the popular Screen Actors Guild strike. The strike prevented the use of live actors, so the Gecko ad was born. The first commercial has the gecko pleading for people to stop calling him instead of GEICO, insinuating that they are mistaking gecko for GEICO. Kelsey Grammar was the first to do the voice for the gecko. Steve Bassett, a creative director for the Martin Agency, says that in following ads they changed the voice so that the GEICO gecko had an unexpected Cockney accent. Again, the accent changed to sound more like a working-class person in an effort to make people feel closer to him while also “humanizing” him. Basset states that, “As computer animation got better and as we got to know the character better, we did a few things. We wanted to make him a little more guy-next-door. And he looks a lot more real than he’s looked before”.
GEICO continued to offer a variety of commercials and ads. One very popular theme revolved around misdirection. The public will be watching what they think is a commercial for a totally different product, and then suddenly it changes into what is actually a GEICO commercial. Energizer is another company famous for using misdirection in its ads. Fictional characters have been used, such as Speed Racer and Bill Duchess. Real people, such as Tony Little, have also appeared in GEICO commercials. Other commercials have been of a hair loss doctor who switched to GEICO and saved money, a show about a fish, and a fictional soap opera based on a couple breaking up with one another. A set of GEICO ads was also produced that involved a fake reality show named “Tiny House”. In this show, “contestants” are forced to live in a half-scale house.
Parody ads became popular in the promotion of GEICO insurance. Fictional products such as tomato soda, long distance phone service, fast-food, and a reality television show were shown with the end slogan of “but it won’t save you any money on car insurance.” The commercial would then end with “Why haven’t you called GEICO?” The Energizer Bunny first used fictional characters in their commercials starting in the late ’80s, and GEICO’s commercials are reminiscent of those.
Other ads would start with a character breaking some sort of bad news to someone else – for example, a pitcher being relieved by his baseball manager. They then offer the fact that they have good news, explaining that “I just saved a bunch of money on my car insurance by switching to GEICO!” The kicker of the commercial is that that news really doesn’t help the other person. Some parodies included celebrities such as actor Sebastian Siegel. He played in one of the most watched “I’ve got good news” ads, a fictional soap opera parody for GEICO insurance.
Another GEICO commercial series features actor Jerry Lambert playing a stereotypical boring insurance agent. One commercial shows him reading to kids, who are sitting there looking bored, from a book of insurance fairy tales. Another one shows him reading an e-mail from a viewer who says it would be “the bomb,” meaning it would be great, if the Gecko would dance the “The Robot.” You then see the Gecko doing a graceful and smooth dance to a song called “Sweet World” by the band Comega Men. Afterwards, the camera cuts back to the insurance man trying to do the same dance, but with very stiff and awkward movements.
Many celebrities have been featured in the GEICO ads that have been aired over the years. Charo, Charlton Heston, Burt Bacharach, Little Richard, Don LaFontaine, Peter Graves, and Verne Troyer are some of those who talk about their GEICO stories and experiences.
The commercials then switched over to the Caveman Series. One of the first ones appeared to be a talking heads news interview, but instead were the cavemen. This series became increasingly popular over time, and it was also created by the Martin Agency. These ads feature Neanderthal-like cavemen in a modern day setting. The ad or commercial has the tagline “GEICO: So easy a caveman could do it,” and then shows the cavemen being upset that they are still stereotyped as stupid and backwards. These ads show the cavemen as being active members of modern society, being smart and cultured among their peers. These GEICO commercials show them in various settings of everyday living, such as eating out, arriving at exclusive parties and seeing their therapists. The cavemen are seen as being a normal part of today’s society yet still being stereotyped as dumb and backwards, and this is where the ads’ humor lies. The cavemen try to defend themselves, unsuccessfully, and get increasingly annoyed.
These new GEICO ads became so popular a series of interactive websites were then created. GEICO’s in-house creative team at Caveman’s Crib wrote and produced the successful series. Subsequently, a TV series entitled Cavemen was born, and debuted on ABC Television in the fall of 2007.
That same year, GEICO started its own social networking website. My Great Rides was created specifically for motorcycle owners and was developed as a place to share stories, pictures and comments on bikes and lives. My Great Rides has proven to be another successful endeavor by GEICO.
GEICO insurance sponsors a car in the NASCAR Busch Series, Number 7. Number 7 is driven by Mike Wallace. A commercial was developed that shows a race team and a young boy who says he is a relative of Mike Wallace and that he is a better driver than Mike Wallace. In the commercial, the boy says, “When people see Mike Wallace and the GEICO Number 7 doing well, they’ll think of saving a bunch of money on car insurance. But when they see me, they’ll say, “There goes Lauren Wallace; the greatest thing to ever climb into a racecar.”
These NASCAR commercials are produced in different format. One such format is an interview. An unseen narrator talks to the eager go-kart driver, saying, “What do you think of Mike Wallace?” The child answers, “Whatever, he’s out there selling car insurance; I’m out there to win.” The narrator then asks about the child’s relation to Mike Wallace, to which he replies, “I didn’t say I wouldn’t go fishing with the man, all I’m saying is if he comes near me, I’ll put him in the wall.” The narrator responds to this remark with his own quip,” You don’t race in the Busch Series.” The boy then answers, “Listen, go-kart track, grocery store, those remote controlled boats; when it comes to Mike Wallace the story ends with me putting him in the wall.”
There are newer ads to this NASCAR GEICO insurance series where the boy refers to himself as “100 miles away and ready to strike,” and also as “lightning in a bottle”.
The ever-popular website YouTube also features GEICO ads. These videos show acts that seem to have no bearing on buying car insurance, such as a hallway mattress fight or a strange collection of expressions
muttered by a webcam user (YouTube’s Brandon Hardesty). An announcer narrates again in the background of these ads, telling the audience that “There may be better ways to spend 15 minutes online.” This implies that instead of watching dumb videos, you could be getting a quote from GEICO insurance. These videos are similar to the “Stupid Things” advertisements. They are also aired back-to-back in sets of two.
TRS, which is the show The Real Scoop, was previewed in September of 2007.This series of ads was related to an E! True Hollywood Story-type show about fictional TV characters that were famous, such as Fred Flintstone, Cabbage Patch Kids and Jed Clampett. These characters claimed to be insured thru GEICO, featuring pretend interviews by pretend investigators.
There are many other insurance companies out there who are in competition with GEICO insurance. These major competitors include, but are not limited to, Allstate, Nationwide, Progressive, State Farm and USAA. Progressive can be aggressive in their advertisements, and many of GEICO’s ads counter Progressive’s claims of being able to quote their rates and several of their competitors’ rates on their website.
Leo and Lillian Goodwin took a risk in the mid-1930′s to create their company. While the Great Depression roared on, and thousands of people were struggling to survive, they founded one of the most respected and successful companies of their time. GEICO stands for Government Employees Insurance Company. Leo Goodwin began the company while he resided in Texas. His plan was to market his insurance to specific consumer groups, with the goal to keep his company’s costs low. That way he could pass his savings on to his customers while still earning a profit. Goodwin was successful and GEICO started to become a popular company. In 1936, Goodwin opened a GEICO operation in Washington, D.C.
As an established bookkeeper, Lillian Goodwin worked side by side with her husband to start his company and became an active figure early on. She took care of all the company’s accounting tasks as well as helping to underwrite policies, set insurance rates, issue policies to customers and advertise GEICO premium rates to target customers. Federal employees and top noncommissioned Military officers were the main targeted groups. The staff of GEICO totaled 12 people in 1936, although there were already 3,700 policies in force.
A family friend of the Goodwin’s joined the company in 1948. Lorimar Davidson was an investment banker who joined GEICO insurance and helped the Goodwins find new investors when the original ones decided to move on to new opportunities. A new investor in the company was Benjamin Graham, who was a business professor at Columbia University in New York. He had Warren Buffett in his class at one point. In 1951 Buffett became part of the GEICO family.
The story goes that in the year of 1951 Buffett took a train ride to the state of Washington on a Saturday to learn about the GEICO Company. Unfortunately for him, the office was closed. But a working janitor directed him on where to find Davidson, who took it upon himself to describe the company and all of its advantages. From that one meeting, Buffett learned enough to make his first purchase of GEICO stock.
Davidson became Goodwin’s successor when he officially retired in the year 1958. GEICO’s new headquarters opened in Chevy Chase, Maryland, in 1959. Davidson became president of this particular branch while GEICO insurnace continued on successfully into its third decade of business.
As the ’60′s rolled on, GEICO insurance became more and more successful, fulfilling policyholders’ needs left and right. In 1964, they passed the one million policyholder mark, and in 1965 insurance premiums reached a grand total of $150 million. In 1966, net earnings doubled to $13 million. GEICO started opening numerous sales and service offices to meet the needs of walk-in customers. Their very first drive-in claims office made its appearance in 1965.
The first half of the 1970s was a rough time for GEICO insurance. As the Goodwin’s were in the midst of their retirement, Lillian died in 1970. The following year brought Leo Goodwin’s death. As aggressive expansion of other insurance companies started becoming an issue in the mid-70′s, loss reserves at GEICO started showing. The company went thru a difficult time for awhile.
GEICO pressed on even during those rough years. They continued to strengthen their underwriting and other company policies to keep up with their reputation as a fiscally sound corporation. In 1976, Warren Buffett purchased a second share of GEICO stock, reported to total 1 million shares in all. A chief investment officer joined the GEICO family in 1979. This was Lou Simpson.
In the 1980s prudent underwriting went on, and the expansion of the GEICO insurance company was slow but steady. 24-hour, 7 day a week and 365 days a year telephone service was introduced for claims, sales and service in 1981. GEICO’s intent with this new feature was to prove their incredible emphasis on customer service.
A new chairman was introduced in 1993. Olza “Tony” Nicely became chairman, president and CEO of GEICO. He helped work to enlarge the customer base through a new and improved four-company plan. Increased advertising budgets also helped GEICO become better known and recognized throughout the nation.
Warren Buffett was impressed by the continuing success of this insurance company. So in 1995, his Berkshire Hathaway investment firm made a very large bid to obtain the remaining stock shares of GEICO. By 1996, GEICO was a subsidiary of a company that was one of the biggest and best in the nation.
Advertising became a very important aspect of GEICO insurance. Direct mail pieces were sent out and filled mailboxes around the country. Ads were seen everywhere, and the company’s growth climbed even higher. The now-famous GEICO gecko was introduced in television ads in 2000 and has since been an advertising icon.
The International Insurance Society Hall of Fame inducted Leo Goodwin in 2001. Goodwin’s ideas continue to help GEICO grow and develop even years after his passing.
2003 saw GEICO insurance surpass 5 million policyholders. Operations also opened in Tucson, Arizona, in December of that year. GEICO also opened a new center in Buffalo, New York, and company officials marked the opening with an official announcement.
As the Buffalo office was up and running thru 2004, another big announcement was made that summer. GEICO announced that they were reentering the New Jersey vehicle market. This made it into the local news, as well as the regional and national news. By December of 2004, GEICO had reached the 6 million mark in policyholders.
GEICO currently has over 21,500 associates of their company in 12 major locations around the country. They celebrate their success and their recent return to New Jersey. The founders of the company, Leo and Lillian Goodwin, would no doubt be very proud of the booming success that the company has become. The future of the company is still strong. Tony Nicely believes that as long as knowledgeable associates continue to be employed with the company, GEICO insurance will grow surely and steadily. He believes that GEICO’s way of thinking can be summed up in three points: excellent coverage, low prices, and outstanding customer service.
More About GEICO
GEICO is a company based in the United States. GEICO is a personal lines automobile insurance company that stands for Government Employees Insurance Companies. The name may be a bit misleading as it was actually never a government agency. Instead, it was developed as a private firm originally thought up by the above-mentioned Leo and Lillian Goodwin to sell auto insurance straight to federal government employees and their families. GEICO assumed that these people would be more financially stable than the general public, therefore being less of a financial risk to their company. GEICO began to insure to the general public in the ’70s after real-time access to driving records became available.
GEICO likes to deal with their policyholders more by telephone and via the Internet. This way it frees up capital that would have to be spent on employing agents throughout the field. However, GEICO does offer field agents and offices, mostly near military bases, and these agents are known as GFR’s, or GEICO Field Representatives.
Currently, GEICO insurance provides coverage for 10 million vehicles owned by 7 million policyholders. They are a wholly-owned subsidiary of Berkshire Hathaway.
GEICO’s advertising strategy is known for its sheer volume and that it focuses mainly on their mascots, most notably the gecko and the cavemen. The gecko’s accent was changed a few times, more recently to reflect on the working class, in an effort to “humanize” him and make him “more accessible and someone you enjoy listening to, some bloke you want to get to know.” GEICO also used parody ads, featuring Japanese idol fan clubs, upcoming Saturday morning cartoons that were only fictional, and senator election campaign ads. The ending always goes, “But it won’t save you money on car insurance!” After that slogan is heard, the commercial ends with “Why haven’t you called GEICO?” GEICO is a headstrong company that has proved its worthiness in the amount of years it has been around and the millions of policyholders who are satisfied.Source: www.insuranceusa.com