GECIO CA-why?

https://www.foxbusiness.com/economy/geico-closes-california-…

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At first I thought perhaps closing the offices was a remote working tactic…after all, their business model isn’t exactly big on walk-in traffic.

But apparently they will also stop having telephone agents. Only via computer.

The reasons aren’t clear, but presumably it’s not what you do when things are going great.

Jim

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I thought WEB loves those guys?

Even Buffett has blind spots. Just read the discussion to the linked article to get the reasoning.

But apparently they will also stop having telephone agents. Only via computer.

Telephone agents could work anywhere right? It just means GEICO will close offices and layoff agents in California.

Telephone agents could work anywhere right? It just means GEICO will close offices and layoff agents in California.

I thought their claim to fame was that they operated predominantly by telephone and, more recently, Internet, and cut out the costs of having local agents. Apparently, that is not entirely true, but it may still be the profitable part of their business. And if you were going to throw in the towel on agents and offices, surely high-cost California would be the place to start.

GEICO apparently has 40,000 employees, laying off ‘hundreds’ in agencies in California does not seem to be a very dramatic development.

dtb

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Interesting. I bet there is more of the same to come if policy growth, renewals and net income are steady. We have been a policy holder for 30 years and have never set foot in a GEICO office so maybe this makes a lot of sense.

I imagine most elderly and less computer savvy folks are not looking to shop around as much and most young and middle age folks prefer online services. Fyi, I hit a deer a couple years ago, downloaded the app, sent pictures of the damage to my SUV and had a contact and approval for the body work from a claims agent within 24 hours so it seemed to work well without the human touch.

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But apparently they will also stop having telephone agents. Only via computer.

Telephone agents could work anywhere right? It just means GEICO will close offices and layoff agents in California.

That was my first thought, too.
But according to the article I read, no: Californians will no longer be able to order by telephone.
The article could of course be wrong.

Jim

For us that live in California we know of several reasons why you wouldn’t want to do business here if you were an insurance company. :slight_smile: I had Chubb for decades. They essentially dropped me on a technicality when a bought a different home with almost zero chance of fire. Chubb has declared every home in California high fire risk and won’t write new insurance on a high fire risk. I’ve had no claims ever. It’s just an expensive place to do business. Maybe someone was trying to unionize their workforce in California.

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This GEICO post made me think of Todd Combs. Is he still running things at GEICO? Better yet is he still alive??!:slightly_smiling_face:. When was the last time anyone even heard his name mentioned. Sort of strange.

say nothing but get recs from moron base

So anyone who disagrees with you is a moron?

Tom

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Elsewhere I saw some comments where Geico isn’t happy with some restriction CA have on raising rates so they thought it was Geico trying to stir up something. However I also saw that Geico admitted they wouldn’t pull out of CA because it would be too much money to walk away from.

Right now companies seem to be setting new highs (lows?) for greed and Geico is no exception. I know some here seem unable to criticize anything BRK related but hey, some of the companies under the umbrella are hardly things many would be proud of.

It is interesting what triggers people. Perhaps paying very high levels of state income tax and being told what not to do while Newsome and others enjoy the French Laundry was just too much. The crazy left AND the crazy right are problematic. :clown_face:

I love California though.

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Right now companies seem to be setting new highs (lows?) for greed and Geico is no exception.
I know some here seem unable to criticize anything BRK related but hey, some of the companies under
the umbrella are hardly things many would be proud of.

I’m OK with that.
On some fronts, the interests of a company and the interests of the client are aligned.
They both want clients to be happy, for example. They both want the products to work.

But when it comes to cold hard cash, their interests are exact opposites.
A company wants the price as high as possible, the client wants it as low as possible.
As a company owner, I want the prices to be as high as possible consistent with the concept of “long term greedy”.

I want our insurers to turn an underwriting profit.
That means that the average person is paying more in premiums than the average person gets back in claims, AND paying in advance for the privilege.
Kind of like a front loaded high fee mutual fund.
If buying an insurance policy weren’t so useful for risk management, it would be a dumb allocation of your capital.
I’m absolutely fine being on the other side of that deal.

Jim

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“It is interesting what triggers people. Perhaps paying very high levels of state income tax and being told what not to do while Newsome and others enjoy the French Laundry was just too much. The crazy left AND the crazy right are problematic.”

I recently attended the funeral of a long time friend’s mother. At the funeral met one of her grandsons who had recently graduated in engineering from San Diego State and was now working in Silicon Valley.

I asked him how he liked working in Silicon Valley. He told me that he loved his job, but there were some things that made him just scratch his head.

He went on to tell me he was shocked to find there were tampon machines in the men’s locker room at his gym.

How do you reason with people who put tampon machines in men’s locker rooms?

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“How do you reason with people who put tampon machines in men’s locker rooms“

I’m sure some here will educate us! World is crazy.

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“This GEICO post made me think of Todd Combs. Is he still running things at GEICO?”

Yes, we just received a GEICO renewal with a cover letter signed by him. I am surprised that Todd is still there as I thought it was going to be a short term situation. I did not see him at the Omaha meeting. He had some experience with Progressive before his investing career. Hopefully, managing this business will add to and improve his investing skills long-term. Let’s hope it does not limit him from discovering investment opportunities.

It occurred to me on July 21 that insurance agents are increasingly superfluous.

Around 9:45 pm on July 20 – a calm, very hot, rainless, windless night – there was a sudden roar and the whole house shook. My first thought was that a nearby pot farm must have ignited their solvents and taken their fertilizer warehouse with it. I went outside, expecting to hear sirens.

Instead, it turned out that the 100+ year-old oak shading our 115 year-old veranda had dropped a thousand-pound limb, taking a chunk of the veranda and porch with it and cracking the support columns into the bargain. (Fortunately, it spared the portion of the veranda rail that still shows where the tied-up horses had rubbed the edge smooth, in the pre-Model T days when this was a working farm)

The next morning, inspection in the light of day showed no rot in that limb, and really perfectly healthy-appearing wood with bright, healthy leaves and hundreds of developing acorns.

(Ever hear of “sudden limb drop” in mature oaks and elms? I hadn’t either: https://ucanr.edu/blogs/blogcore/postdetail.cfm?postnum=5350… The tree had been inspected and trimmed by a very well-respected, competent certified arborist within the last year.)

Anyhow: I still haven’t contacted nor heard a peep from my agent, and doubt that I will. Instead, I filed a claim online on July 21, including uploading a number of pictures. An adjuster drove down a few days later, and the ~six figures in repairs will proceed from here.

My point is, I’m not sure what the local agent is doing to warrant an office, a wage, a secretary. And if I found myself tomorrow in the insurance business and employing agents only in California, I’d be wondering: Why?

–sutton

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My point is, I’m not sure what the local agent is doing to warrant an office, a wage, a secretary. And if I found myself tomorrow in the insurance business and employing agents only in California, I’d be wondering: Why?

It’s been decades since I had to see an “insurance agent” to buy insurance (in CA). All online (other than getting the car fixed), including a very lengthy injury/damage claim in 2002 managed mostly through email with occasional phone calls. I expect the main benefit of agents from a company PoV are (1) upselling (2) reaching the rapidly shrinking pool of people young enough to drive, but not young enough to use the Internet.

“The article could of course be wrong”

It was Fox or Faux as it were. Could? be wrong…

The whole thing with live agencies has been weird for GEICO in CA. Very few people other than largely older AAA customers go to auto insurance offices at all out here, other than small town independent agencies. And AAA is mostly because they have in-house mini-DMV offices which is way better than going to the local DMV, trust me… It’s a nothing burger as it were.