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Does anyone know why it is that their insurance businesses post underwriting profits? Is there anything structural? Why does GEICO have such a cost-driven moat?
by fovc 10y ago
Does anyone know why it is that their insurance businesses post underwriting profits? Is there anything structural? Why does GEICO have such a cost-driven moat?
- valuearb 10y agoThey post underwriting profits cause he picks excellent insurance businesses. GEICOs moat is customer satisfaction. Obviously selling direct means their product is a great value, and service means hard to get their customers to switch.
- pg314 10y agoAn owner (Buffett) that understands the insurance business goes a long way. There is less pressure than in a public company to do business even when the appropriate premiums can't be obtained (see p. 10). Having a very large and sound balance sheet also helps. Their insurance businesses don't always make money. There have been years in the past that they posted big losses.