Posts Tagged ‘Geico’

Geico Insurance In Hot Water

Wednesday, October 14th, 2015

Geico Insurance ArizonaThat cute little lizard seems to have gotten himself in some hot water. Recently the California Department of Insurance announced that Geico insurance is on the hook for $6 million in a settlement over discriminatory auto-insurance pricing.

The insurance company was apparently distorting the minimum auto policy of $15,000 per person and $30,000 per automobile accident to customers the company considered less desirable. Instead of the actual minimum policy rates, Geico quoted certain customers with figures as high as $100,000 per per person and a jaw-dropping $300,000 per potential auto accident. According to the California Department of Insurance—this was the lowest quote for undesirable potential customers. Unsurprisingly, these steep quotes—which instantly created sticker shock–encouraged customers to look elsewhere for insurance policies.

According to research conducted by the Consumer Federation of California who tested Geico’s website, the insurer systematically quoted significantly higher rates for any potential customer who was unmarried, had a low-paying job, unemployed, or did not hold a Bachelor’s degree from a reputable higher education institution. Gaps in insurance coverage also resulted in sky-high rates.

Geico denied the claims, but will change is business practices as per the settlement. If the company fails to do so in three years they could be fines another $6 million.

Geico And Allstate To Raise Premiums

Wednesday, October 7th, 2015

Phoenix windshield replacement insurance claimsTwo of the largest auto insurance providers in the United States are set to raise premiums for policyholders.

Famous for their advertisements that state the company saves customers 15% in 15 minutes, Geico has said it is raising auto premiums following disappointing underwriting results in the first quarter of 2015. Geico’s underwriting profit for that period was $160 million down from $353 million from the same period in 2014.The company also reported more claims and claims that were more severe in several major coverage areas, with its loss ratio increasing to 80.1 as opposed to 75.8 in 2014.

Premiums written by Geico underwriters totaled $5,886 in the first quarter of 2015, an increase of 10.2%. A the same time, losses and lost adjustment expenses increased 16.6%, while underwriting expenses jumped 9.5%. SNL Financial has stated that Geico is the biggest spender out of any American property and casualty insurer, paying $1.18 billion in 2013 for advertising.Geico Insurance Arizona

Even though it experienced a 13% increase in first quarter profits, Allstate the largest publicly traded auto and home insurer in the United States has indicated it will also raise auto premiums. Allstate’s underwriting income from its auto division fell 48% during the first quarter to $144 million. Tom Wilson, Allstate CEO, indicated that accidents have increased because economic activity has increased with the improving economy. Premium hikes planned for late 2015 have been implemented earlier.

According to SNL, Geico is the second largest vehicle insurer in the United States behind State Farm. In 2013, Geico had approximately 10.4% of the market share, a figure that company executives believe has grown to 10.8%.

During 2014, Geico reported writing premiums worth approximately $21 billion, a figure 9.8% higher than the previous year. Its loss ratio for 2014 was 77.7, while underwriting expenses increased to $3.4 billion.