Buffet’s Geico Offers $2.5 Billion Credits to Auto Policyholders
Geico Corp, a part of billionaire Warren Buffett’s Berkshire Hathaway, stated Tuesday it can offer almost $2.5 billion of credits to its 19 million auto and motorcycle policyholders, reflecting the drop in driving stemming from the coronavirus epidemic.
The insurer stated it will offer a 15% credit on policies up for renewal between April 8 and Oct. 7, averaging about $150 per auto policy and $30 per bike policy.
Geico stated it has around 18 million auto buyers and 1 million motorcycle clients.
The declaration came one day after Allstate Corp stated it will return over $600 million to policyholders, principally through a “payback” of 15% of premiums for April and May on around 18 million policies.
Many Americans are driving less due to remain-at-home orders aimed toward curbing the pandemic.
Geico stated car accidents are down considerably, although it expects a return to near-normal ranges as the pandemic subsides.
State Farm and Progressive are also reviewing their premium practices in light of the drop in driving.
Geico gained $35.57 billion of premiums last year, and paid out $28.94 billion, or 81.3%, to cover loss claims.
Pre-tax underwriting gains totaled $1.51 billion, after accounting for underwriting expenses.