Geico: How Warren Buffett Saved It from Bankruptcy?
Geico: How Warren Buffett Saved It from Bankruptcy?
GEICO started in 1936 in Fort Worth, Texas, at the height of the Great Depression.3 Its original name, the Government Employees Insurance Company, sprung from the fact that GEICO’s founder, Leo Goodwin, wanted to insure government employees only, especially those in the military.
Goodwin had worked at fellow insurance rival, USAA, since 1925. USSA specialized only in military personnel. With his years of experience at the company, Goodwin noticed that military personnel got into car accidents at much lower rates than other American drivers. It’s here where he got his idea for GEICO from.
When he founded GEICO with this mission at heart, he put up a mere 100,000 dollar investment.4 A year later he moved his company to our nation’s capital to focus on the growing federal government during FDR’s New Deal during the Great Depression.