By Greg Marsh on March 4, 2010 at 8:48 AM
Posted in: Odds & Ends
Imagine yourself in the mid-1930s – the Great Depression – as a 50-ish mid-level insurance executive in Fort Worth, Texas. You’ve gone as far as you can go in your company – it only allows ex-military folks to hold the top jobs, and you never served. What do you do?
That was the situation Leo Goodwin was in. Most of us, in Leo’s shoes, would probably hang in there at least until the economy improved, and maybe longer – retirement age wouldn’t be too far off. But that’s not what Leo did. He left USAA and started his own insurance company. Crazy, right?
Crazy like a fox, it turned out. Goodwin chose to target federal employees, figuring that they were more likely than most to remain employed even in tough times, and be able to pay their premiums. He also chose a direct business model, as opposed to the agency model that’s still prevalent today.
And he worked his tail off. In 1936, he settled on the Government Employees Insurance Company name and moved his fledgling business to Washington, D.C., his target market’s primary employment center. With his new bride, Lillian, they ran the business from their kitchen table – in the red, mostly, for the first few years. But by 1941, the company was profitable. By the time Leo Goodwin retired in 1958, GEICO was well on its way to becoming what we are now – the third-largest auto insurer in the nation.
We should all be so crazy.