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Detailed SWOT Analysis of GEICO – One Of The Fastest Growing Auto Insurance Companies In America

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Last time we studied the SWOT analysis of La Poste which is the postal and express courier services industry in France. This time around, let us dive into the detailed study or SWOT analysis on GEICO. Let’s get started.

The second-largest auto insurer – GEICO is the market leader and serves the people in the US with insurance products that are low in rates but with superior quality. The main mission is the satisfaction of their customers. Along with this, it also wants to benefit society at large which includes providing equal employment opportunities.

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Before we go into the SWOT Analysis of GEICO, let us know about GEICO as a company.

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About GEICO

SWOT Analysis of GEICO - The People Behind The Success Of GEICO
(The People Behind The Success Of GEICO)

GEICO stands for government employees insurance company which is an American fastest-growing auto insurance company. Earlier the company was only dealing with auto insurance but now it has also started offering extended services to all-terrain vehicles, motorcycles, boats, insurance etc.

It truly believes in “Real service, real savings”. GEICO was established in 1936 by Leo and Lillian Goodwin. GEICO is built on ingenuity, perseverance, innovation, resilience, hard and honest work.

 

Quick Stats on GEICO
Founder Leo and Lillian Goodwin
Year Founded 1936
Origin San Antonio, Texas, US
No. of Employees 40,000
Company Type Subsidiary
Market Cap N/A
Annual Revenue $ 35.093 Billion (2020)
Net Income/ Profit N/A

 

SWOT Analysis of GEICO - Range of Insurance Products


Products of GEICO

There is so much more to this insurance company and what it has to offer to its customers than its intelligent and lovable spokesperson. The company also offers a wide variety of affordable insurance products and GEICO mobile and web apps. It deals with:

  • Life insurance
  • Boat insurance
  • Auto insurance
  • Business insurance
  • Flood insurance


Competitors of GEICO

GEICO’s top five major competitors are:

  • Safeco insurance
  • Mercury insurance
  • Progressive insurance
  • Allstate
  • Auto-owners insurance


Now that we have understood the company’s core products and services, let’s dive deep into the SWOT analysis of GEICO.


SWOT Analysis of GEICO

SWOT analysis is a study which is undertaken by the majority of companies to determine their core strengths, weaknesses, opportunities and threats. It is a framework that is used to evaluate a company’s competitive position which later helps in strategic planning. SWOT analysis can be conducted by any popular brand or any brand which is still new in the market can make use of this template to evaluate internal and external variables that might influence the brand authority and market development.

To better understand the SWOT analysis of GEICO, refer to the infographics below:

SWOT Analysis of GEICO - SWOT Infographics of GEICO

Below is a step-by-step detailed guide to help you with the SWOT analysis of GEICO.

Strengths of GEICO

The strengths are basically what makes the brand different from the other competitors and what the organisation excels at. Following are the strengths:

  • Reach and Distribution: GEICO has a large number of outlets, mostly in every state which is supported by a large strong distribution network. This makes sure that the products are made easily available to their customers at the right time.
  • Cost Structure: As we read earlier, the main motive is to make the products available at a low rate so that they can be more affordable. GEICO’s low-cost structure helps them supply products that are low cost but with superior quality.
  • Dealer Community: GEICO has built a very strong relationship with its dealers that not only help in supplying the products but also promote the company’s core products and training.
  • Financial Position: GEICO has a very strong financial position in the market with consecutive profits over the years along with accumulated profit reserves which can be utilised for future expenditures or marketing activities.
  • Skilled Labour Force: GEICO has invested heavily in the employees that have made them not only skilled but are also highly motivated.
  • High Level of Customer Satisfaction: GEICO provides coverage for more than 24 million motor vehicles and has a very strong customer relationship management team through which they keep their current customers very satisfied and also enjoy a good brand equity status among potential customers.


Weaknesses of GEICO

The weaknesses are a major drawback that stops the organisation from performing at its optimum level. They are the areas in which businesses can make improvements. The major drawbacks are as follows:

  • Research and Development: GEICO has a good share of expenditure on the research and development department but it is spending way less than a few of the players within the industry which have benefitted as a result of their innovative products.
  • Diversity in the Workforce: The local workers contribute to the majority of the workforce at GEICO making it difficult for outsiders to adjust and hence resulting in the loss of talent.
  • High Employee Turnover Rates: GEICO has a very high employee turnover rate as compared to its competitors which means it spends a lot on training activities as employees keep leaving and joining.
  • Low Interest: Low-interest rate structure in the US decreases the profitability of people buying insurance from GEICO. 


Opportunities of GEICO

Opportunities are the favourable external factors that may give the organization a competitive advantage over others. The opportunities of GEICO are as follows:

  • Social Media: Over the years the number of active users on social media channels has increased and with this GEICO can make use of its social media handles to promote its products, interact with customers and even provide after-sale services.

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  • Transport Industry: The transport industry has been booming and is expected to boom in the next few years as well which has resulted in more auto insurance which is helpful for GEICO to scale its business.
  • Globalisation: Increased globalisation doesn’t restrict GEICO anymore to conducting activities in its own country which can act as an opportunity to extend operation in other countries and thus enter new markets and unleash potentials of other new markets.
  • Future of Insurance Company: Global life premium insurance growth is predicted to rebound to 3% with increased risk awareness owing to COVID-19 and global economic recovery set to accelerate the demand for life insurance products. 
  • Future Trends: The next 10 years will see the insurance industry moving from traditional to more customer-centric products. In the post-pandemic era, due to personalized services, the products are given based on information collected from external sources and devices.


Threats of GEICO

Threats are those factors that have the potential to provide harm to the organisation in any form. The threats of GEICO are as follows:

  • Technological Advancements: The technological advancements by a few competitors can pose a threat to GEICO as today’s customers are more attracted towards new technological advancements and may be lost to competitors’ offerings thus reducing the market share of GEICO.
  • Competition: There is always an ongoing competition that puts downward pressure on the prices. This could lead to lower profits if it makes changes in the price or may also result in lower market share if it doesn’t make price changes.
  • Fluctuating Interest Rates: The interest rates keep on fluctuating and don’t provide a stable financial and economic environment.
  • Exchange Rate: The exchange rate also keeps fluctuating and makes it difficult for a company like GEICO because it extends service internationally while its suppliers are local.

This ends our detailed SWOT analysis of GEICO. Let us conclude our learning below.

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To Conclude

GEICO is a well-known insurance brand with a significant global presence. In the SWOT analysis of GEICO, we observed that the company is heavily reliant and enjoys strong brand recognition and trust with its customers. It has a strong distribution network and has reached across all the markets it serves, but suffers from an increasing number of suppliers in the same space and better R&D efforts by its competitors.

Also, one point not to miss out on is that GEICO is in line with its marketing effort. It has created a customer base for itself by tapping into the digital era and creating a social media presence on several platforms. If you are interested in learning digital marketing, don’t forget to check out IIDE’s 3 Month Advanced Digital Marketing Course.

We hope this blog on the SWOT Analysis of GEICO has given you a good insight into the company’s strengths, weaknesses, opportunities and threats. You can also read our comprehensive study on the SWOT Analysis of JP Morgan Chase.

If you enjoy in-depth company research just like the SWOT analysis of GEICO, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of GEICO in the comments section below.

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

Aditya Shastri

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