Geico Accident Auto Insurance: The history of one of the auto insurance industries major players

Most people know Geico by the adorable little Geico Gecko in their commercials. Maybe the line "save a buck or two" comes to mind. Some even know that it is owned by the second wealthiest man, Warren Buffet. Most, however, do not know that Geico has been around since the 1930's.

Geico, which stands for the Government Employees Insurance Company, was started by Leo and Lillian Goodwin in the 1930's during the great depression. Geico insurance was created with the idea that if insurance were marketed directly to a targeted consumer base then the savings could be passed along to the consumer via lower premiums. Geico's target customer was federal employees and military officers. The business model proved to be solid and the company began to grow quickly. By 1936 Geico established operations in Washington DC, had 3,700 active policies, and a staff of 12.

Lorimer Davidson, an investment banker and close friend, helped the Goodwins find additional investors when the original investors decided to go elsewhere. He would later become Leo Goodwin's successor upon his retirement. One of the new investors was Benjamin Graham, well known to many as Warren Buffets teacher and mentor using the value investing strategy. Geico steadily grew through the 1960's passing the 1 million policy holder mark in 1964, and premiums reaching $150 million in 1965.

Geico went through some difficult times in the 1970's, seeing the loss of first Lillian Goodwin then Leo Goodwin, and a significant drop in their previously almost boundless expansion. However they focused on their underwriting and reserve activities and strengthened the company significantly. In 1976 Warren Buffet made his second stock purchase, this time over 1 million shares.

In the 1980's expansion was a bit slow, but steady, and the companies focus on customer service was paying off. As part of this effort they offered 365 day, 24 hour, telephone support. In 1993 Olza Nicely became Geico's chairman and propelled the company into the national spotlight with a much larger advertising budget. This again caught the attention of Warren Buffet who in 1995 purchased the remaining Geico stock, making Geico a subsidiary of the Berkshire Hathaway investment firm. This in turn propelled national advertising even higher.

In 2000 Geico introduced the Gecko which quickly became quite popular. Geico assets have climbed to 21.2 billion dollars and they have passed the 7 million policy holder mark with over 20,000 associates in over 12 locations.

Check out Geico's site for more information about their policies and up to date auto insurance quotes.