GEICO: Catastrophic Risk, Reserving Discipline & Regulatory Friction
Former Senior Vice President at GEICO
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GEICO: Catastrophic Risk, Reserving Discipline & Regulatory Friction(July 23, 2025)
Former Senior Vice President at GEICO
Interview Transcript
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Hurricane Andrew?
Yes hurricane Andrew, wiped out every penny the company had ever made in homeowners. Short of reinsurance, profits were wiped out in 1992, the year Hurricane Andrew hit. Tony, the CEO at that time, said he couldn't subject the company's livelihood to such risk without getting the necessary premium. So, he decided to sell the book to Travelers. Then, in 2005, Hurricane Katrina hit, flooding New Orleans. Allstate lost all its earnings from homeowners insurance. Without reinsurance, they would have been devastated. Tony was a decade ahead of Allstate. Now, who would take such a risk? My homeowner's premium in Maryland, where I've never made a claim in ten years, increased by 35% last year because Maryland is subsidizing Florida, California, and Texas.
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