Who Owns GEICO?

GEICO was founded on August 22, 1936, by Leo Goodwin Sr. and his wife Lillian Goodwin in San Antonio, Texas. Leo Goodwin had worked for years in the insurance industry and identified a specific market opportunity: federal government employees represented a statistically lower-risk pool of drivers than the general population, due to their stable employment, regular income, and demographic characteristics. By selling directly to this group without the cost of independent insurance agents, Goodwin believed he could offer meaningfully lower premiums while maintaining profitable underwriting results.

The company was initially capitalized with $100,000, with $75,000 provided by Fort Worth businessman Cleaves Rhea and $25,000 from the Goodwins. The name Government Employees Insurance Company reflected the original target market. The direct-to-consumer model, which Goodwin implemented from the company's founding, was unusual in the insurance industry of the 1930s, where independent agents dominated distribution. By eliminating agent commissions, GEICO could offer premiums approximately 15 to 20 percent below comparable coverage from agent-distributed competitors.

GEICO moved its headquarters to Washington D.C. in 1937 to be closer to its target market of federal government employees, and later relocated to Chevy Chase, Maryland, where it remains headquartered today. The company grew steadily through the 1940s and 1950s, expanding its eligible policyholder base beyond federal employees to include military officers, government contractors, and eventually the general public. By the early 1950s, GEICO had grown into a substantial insurance company with a strong balance sheet and consistent profitability.

Warren Buffett first purchased shares in GEICO in January 1951, at the age of 20, after visiting GEICO's Washington D.C. headquarters on a Saturday and persuading a janitor to let him in to meet Lorimer Davidson, a senior executive who would later become CEO. Buffett invested approximately $10,000 in GEICO stock, representing more than half of his net worth at the time, after Davidson spent four hours explaining the company's business model and competitive advantages. Buffett later described this as one of the most important investments of his career and credited Davidson with teaching him the fundamentals of the insurance business.

GEICO experienced a near-fatal crisis in the mid-1970s when the company expanded aggressively into new markets and underpriced its policies, resulting in massive underwriting losses. By 1976, GEICO was on the verge of insolvency, and its stock had fallen from $61 to $2 per share. Jack Byrne was brought in as CEO to restructure the company, implementing dramatic premium increases, canceling unprofitable policies, and cutting costs. Berkshire Hathaway, which had sold its original GEICO position years earlier, repurchased a significant stake in 1976 at the distressed price, recognizing that the underlying business model remained sound despite the management failures that had caused the crisis.

Under Jack Byrne's leadership and subsequently under William Snyder and Tony Nicely, GEICO recovered fully and returned to growth. The company's direct-to-consumer model proved increasingly competitive as telephone and later internet distribution reduced the cost advantage of agent-based competitors. Berkshire Hathaway steadily increased its GEICO stake through the 1980s and early 1990s, and in August 1994, Berkshire announced an offer to acquire the remaining shares it did not own. The transaction closed in January 1996 at approximately $70 per share, valuing GEICO at approximately $2.3 billion in total.

Under Berkshire Hathaway's ownership, GEICO accelerated its growth through aggressive advertising investment. The company became one of the largest advertisers in the United States, with annual advertising spending exceeding $2 billion in recent years. The GEICO Gecko, introduced in 1999, and the "15 minutes could save you 15% or more on car insurance" tagline became among the most recognized advertising campaigns in American history. GEICO's market share in private passenger auto insurance grew from approximately 2 percent at the time of Berkshire's full acquisition to approximately 14 percent by the mid-2020s.

GEICO faced significant underwriting challenges in 2022 and 2023, when elevated claims costs driven by supply chain disruptions, used car price inflation, and increased accident severity resulted in substantial underwriting losses. The company responded with aggressive rate increases and a reduction in advertising spending, which temporarily reduced policy growth but improved underwriting profitability. By 2024 and 2025, GEICO had returned to strong underwriting profitability, with Warren Buffett highlighting GEICO's recovery in Berkshire Hathaway's annual shareholder communications. However, GEICO's market share gains slowed during this period as competitor Progressive, which had invested more heavily in telematics-based pricing, gained ground.