Essay Title: 

GEICO Insurance Operations

March 24, 2016 | Author: | Posted in management, mathematics and economics

Geico Insurance Operations

Custom Research by Essay Geico Insurance Operations

Abstract

Given the consumer driven nature of today ‘s economy , combined with the awesome power that the World Wide Web has to make and destroy businesses in the blink of an eye , there are companies that have entered a new level of business activity by utilizing the power of clever marketing and an online presence . One of most well known is the Government Employees Insurance Company , or GEICO . In this various facets of GEICO ‘s business will be presented to better [banner_entry_middle]

understand if business activity , at least in the case of GEICO , has translated into a profitable organization or simply a highly visible company with little to show for it

Corporate Structure

In the beginning of the GEICO organization , the company was owned and operated by Leo Goodwin , a gentleman who sought in the early 1930s to provide a level of financial stability for those serving in military service and working for the government . Ultimately , the company grew to serve the general public . For many years , the organization remained privately owned , with a CEO and COO leading the company . In 1996 , while still retaining the usual corporate structure , GEICO became a publicly owned company when it was purchased by Berkshire Hathaway , the multi-billion dollar conglomerate led by investor Warren Buffett (Government Employees Insurance Company , 2006

Distribution System

While GEICO has retained a traditional distribution system in some respects-retaining local offices of independent agents , the company has also revolutionized the insurance business by allowing customers to purchase coverage via the Internet 24 hours a day , combined with a live customer service telephone line which is also available 24 hours a day What this does for the company is allow it to capture the business of the customer at the exact moment that they desire a purchase . This also gives them less time to change their minds or choose another insurance carrier

Types of Coverage Written

To the average consumer , due to GEICO ‘s tremendous amount of advertising and online presence , the company is best known as a carrier of automobile insurance , and indeed , has built the core of its business in auto insurance . However , in addition to auto insurance , GEICO offers customers insurance products for their motorcycles , all-terrain vehicles (ATV ‘s , boats , homes , apartments and mobile homes . Personal umbrella protection and life insurance are also available (Government Employees Insurance Company , 2006

Underwriting Criteria

Taking into account that competitors and critics of GEICO may be stretching the truth in to justify their dislike of the company the underwriting criteria that GEICO employs have come under fire in recent years , mostly due to the accusation that the main underwriting criterion that GEICO uses is the credit rating of their potential customers , which in effect qualifies them for policies not based upon their risk as an insured party , but rather on their financial position and the ability to pay premiums

In fairness , however , the firm has enjoyed top ratings within the… [banner_entry_footer]

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