I guess he’s counting on this being temporary… buy up market share and the increase the rates to just slightly below, or at what everyone else is charging in the hopes the customers will stick. Annoying for insurance agents, but I’d say from a company standpoint it’s pretty smart for growth, IF you can control losses and keep them minimal. But you’re right, Geico has never been a money loser, so I can’t see him letting them lose a material amount of money.
Seems a little out of Buffet’s character to “accelerate” more business growth if, by his own admission, that business is not profitable.
I guess he’s counting on this being temporary… buy up market share and the increase the rates to just slightly below, or at what everyone else is charging in the hopes the customers will stick. Annoying for insurance agents, but I’d say from a company standpoint it’s pretty smart for growth, IF you can control losses and keep them minimal. But you’re right, Geico has never been a money loser, so I can’t see him letting them lose a material amount of money.
I have heard him say Jeff Bezos is one of the best managers out there; different business but doesn’t Amazon often show a loss?
Bezos invests every single penny back into the company for growth that’s why it’s a trillion dollar company.