Love it.. As a GEICO customer I have the opportunity to take direct action. I will cancel them with relish.
Warren Buffet’s first flirtation with GEICO took place in 1943 as a fledgling investment consultant. Roger Lowenstein tells an anecdote about this in his book Buffett: The Making of an American Capitalist.
Apparently, Buffett, knowing of the involvement of Graham, his mentor, with GEICO, decided to look it over. He visited the company’s offices only to find them closed. The nightwatchman told him that there was someone still working there, late, and agreed to take Buffett in to meet him. The late worker turned out to be Lorimar Davidson, who was to end up running the company.
Buffett interrogated Davidson for several hours, and each man made a good impression on the other. Because of these discussions, Buffett’s investment partnership took a small holding in GEICO, which it eventually sold down.
By 1974, the company was not travelling well. The government had brought in no-liability insurance in some areas, the company had extended its clientele to higher risk categories, and there had been inadequate provision for future claims.
In 1976, it announced a loss of 126 million dollars and the company’s shares, which had traded as high as $42, were down to just under $5. The 1976 Annual General Meeting was a near riot with angry shareholders challenging management. By then, the shares were down to about $2.
There was then a change in company management with J J Byrnes taking over the key role. Byrnes made drastic changes, cancelling high-risk policies, laying off staff and moving office. Despite these changes, the regulatory authorities were hovering over the company’s near carcass.
Buffett had always kept his eye on the company and took the view that despite its problems, the company’s core business was sound.
The company’s premiums also attracted Buffett. Insurance companies receive premiums against the possibility that they may have to pay out claims in the future. Provided the company follows sound actuarial practices and makes adequate provision for claims, this gives it large amounts of cash to invest in profit making ventures. This is what Buffett calls the ‘float’. He saw this as an opportunity to provide cash resources to buy businesses and invest in shares.
Through Katherine Graham, the proprietor of the Washington Post, Buffett arranged to meet with Byrnes and was apparently impressed enough to buy, via Berkshire Hathaway, 500,000 shares in the company with a standing order to buy more........
I will cancel them with orange marmalade (sorry, I know that was lame-political shenanigans are making me silly)
My son had an accident with a hit and run.
Geico did not cover him for he did not get the (required) license number of the car.
Now the poor kid is filing bankruptcy due to the accident..!
(Above is 100% true. LVD)