How GEICO’s Layoffs Has Affected Its Employees and Business
It’s been perhaps, a year since GEICO closed all 38 of its California agent offices. Along with other job cuts, including across its marketing function, the layoff resulted in over 100 job losses. Yet, here we are again, talking about another slice of GEICO layoffs.
These cost-saving moves have helped GEICO to a sizable profit in Q2 2023, coming at a cost of 300 jobs across multiple business units and regions. It also means that policies in-force have been declining. The layoff has directly hit individuals from various departments, including marketing, customer support, the special investigations unit, and IT.
Many affected people have spoken about being swept by the “mass” layoffs. They’ve since actively voiced their experience and support for their peers on social media. It’s now bringing an outpouring of support for these individuals across social media and various online forums.
Among the recently released was Hannah Nelson, a GEICO member since 2014. She reminisced about her journey with the company on LinkedIn, sharing that she has gained so much since she joined. Nelson shared she’s looking forward to newer opportunities despite the unexpected news.
Similarly, Jennifer Ernest was among the ones laid off in the most recent round of layoffs that have shaken the company over the past year. Ernest, who spent 14 years in GEICO’s marketing department, was only a few months into her new role supporting its marketing transformation. She also reflected on the unexpected change on her social platform and shared her experience with the company.
What does this mean for GEICO’s business?
So, is GEICO going out of business anytime soon?
Definitely not.
GEICO had a $1.9 billion underwriting loss before taxes in 2022. In response, it closed its physical offices in California and laid off several employees. Closing its offices was a way for the business to stop the tradition of offering policies through phone agents. Now, GEICO is going the digital route, conducting all insurance transactions through the company’s website or mobile app.
GEICO and its parent company, Berkshire Hathaway had very different business takeaways. GEICO suffered $1.2 billion in currency losses. In contrast, Berkshire had $30.8 in profit despite the soaring prices and delayed supplies. GEICO suffered losses notably in auto insurance where it had six consecutive underwriting losses.
So, while Berkshire brought in profits, GEICO hiked its rates and laid off 7% of its 41,000-person workforce in 2022. But it still saw growth.
Following the string of losses, GEICO made a $703 million underwriting profit and had a combined ratio of 92.7% in the first quarter of 2023. Its underwriting profits benefited from increased average vehicle insurance premiums, lower advertising expenses, and improved prior accident year development.
They cut their underwriting costs down $257 million from 2022 totaling $931 million. Compared to the first quarter of 2022, premiums written decreased by $205 million during the first quarter. Now, GEICO’s total number of policies has declined by 2.4 million (13%) since March 31, 2022.
How can they leverage their growth after the layoffs?
Following the recent layoffs, we’re looking toward the opportunities the affected experts can capitalize on. Our focus is on insurance agents who still have valid insurance licenses. The mass office closures and layoffs would certainly affect business and the direction they can take.
Agency Height is the ideal platform for agents who are keen on continuing to grow and write more business. We can and work towards helping agents establish and gain visibility and credibility for their businesses. All it takes is adding a listing on our platform. It’s a fairly simple process; we can help you learn how to add your listing easily.
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Recent Insurance Industry Layoffs
In recent times, the insurance industry has been navigating a challenging landscape marked by layoffs at some of its most prominent companies.
Read more about the recent insurance layoffs:
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