DESCRIPTION: Holding company for Government Employees Insurance co., which is a major automobile insurance firm (90 percent of annual premium volume) also writing homeowners, fire and boat coverage. In addition, Geico owns 100 percent of Criterion Insurance, an auto insureer for higher risk drivers; 65.3 percent of Government Employees Life Insurance Co. and 67.6 percent of Government Employees Financial Corp., a diversified consumer loan and financial services company in Denver, as well as real estate subsidiaries (OTC). 1979 CONSOLIDATED WRITTEN PREMIUM VOLUME: $634.5 million (Geico's portion was $532.1 million). INCOME FROM OPERATIONS: $59.6 million. PROFITS PER SHARE: $2.14 on operating income and $2.67 on net income of $74.3 million. DIVIDENDS: $6.72 million (36 cents a share, since raised to 40 cents annually). FOUNDED: 1936. TOP EXECUTIVES: John J. Byrne, chairman; Paul J. Hanna, vice chairman and chief financial officer; William B. Snyder, president.
Geico officers note that 1979 was an outstanding year for improved productivity of its work force, which the firm measured as a gain of 13.1 percent. It was a reasonably prosperous year for Geico, too. While operating income decreased modestly from the good performance in 1978, profits per share were enhanced as a result of managing Geico's capital structure. Geico is growing, after near-failure in the 1970s, while management focuses on an acceptable level of underwriting profitability. Marketing remains a problem, with policies in force last year up just 1.2 percent to 1.36 million. Near-term prospects for the property and casualty business are clouded by the expectation of even more pressure on the profits in insurance underwriting. Although Geico's results have not yet been as seriously affected by increasing costs as have the results of many competitors, a reduction in accident frequency in the past year has been more than off-set by repair cost increases, Byrnes notes.