BERKSHIRE HATHAWAY

RECOMMENDATION REPORT

INTRODUCTION

GEICO has grown exponentially since Warren Buffett acquired the company in 1996, insuring
over 28 million vehicles. (Geico, 1996-2023) It is glaringly clear that Warren Buffet is a
knowledgeable investor and has chosen industries that see less issues in economic downturns.
However, there is a current trend in insurance that I believe would benefit his portfolio.

There are many companies that are utilizing a ‘Pay-Per-Mile’ rate policies. Currently,
Nationwide, Allstate, Liberty Mutual, Metromile, and Mile Auto are the MarketWatch
recommended pay per mile auto insurance companies. (Robinson, MarketWatch Guides - How
Does Pay-per-mile Care Insurance Work?, 2023) GEICO is not listed as a provider for Pay Per
Mile auto insurance.

PROBLEM

The commuting habits of the working individual has changed over the last few years, and there
are many people who are driving less and less. College students, people who live in large cities,
people who utilize public transportation for their commute, those who work from home, etc.,
drive their own vehicles very little. There are now 12.7% of full-time employees in the United
States that work from home, with 28.2% working some kind of Hybrid work schedule. (Haan,
2023) By 2025, it is projected that 32.6 million Americans will work from home. (Haan, 2023)
These statistics are changing the way Americans purchase cars and insurance. In large cities,
many who do not work from home are utilizing public transportation more and more. (Rivelli,
2022) How do we tap into this market, as well as maintain our customers who are in these
positions?

SOLUTION

My recommendation would be to roll out a ‘Pay-Per-Mile’ insurance program as a GEICO

product. There are several ways to track a customer’s miles. Some insurers use their own app
to track miles, some use a device that physically connects to a vehicle, and some utilize a car’s
Connect program (Kia Connect, Hyundai Connect, etc.). GEICO’s proprietary app would be the
perfect place to track customer mileage. GEICO is already known for having some of the most
reasonable rates out there. (Robinson, MarketWatch Guides - Benefit of Using Car Insurance
Apps, 2023)This product would not only allow them to enhance that reputation but would open a
completely new customer base, as well as maintain their current customer base.

CONCLUSION

To roll out this product smoothly, my suggestion would be to, first, have IT work on the
technological components necessary to make this a smooth process in the GEICO App. While
the application is being developed, I would suggest marketing work on the advertising
campaign. Then we can move on to internal executive and insurance agent
trainings/publications. From there, we are ready to go live with this modern insurance product.

WORKS CITED

Berkshire Hathaway. (2023). Berkshire Hathaway Specialy Insurance. Retrieved from

bhspecialty.com: https://www.bhspecialty.com/who-we-are/
Berkshire Hathaway Specialy Insurance. (2023, 04 26). Berkshire Hathaway Specialty
Insurance. Retrieved from BHSpecialty.com:
https://www.bhspecialty.com/wpcontent/uploads/2023/07/BHSI-At-A-Glance-
INTERACTIVE-2023-06-26-A.pdf

Buffet, W. (1996, May 6). CNBC Annual Meeting. (B. H. Meeting, Interviewer)

Burrows, D. (2023). What Warren Buffett Is Up To. Kiplinger Personal Finance, 33-33.

Fry, E. (2021, June/July). How the Biggest Names in Business Took on Health Care—and Lost.
Fortune, pp. 100-104.

Geico. (1996-2023). GEICO History. Retrieved from Geico.com:

https://www.geico.com/about/corporate/history/#:~:text=1996%20–
%20Warren%20Buffett%20purchases%20outstanding,wildly%20popular%20GEICO%20
ad%20campaign.

Haan, K. (2023, 06 12). Remote Work Statistics And Trends In 2023. Retrieved from Forbes:
https://www.forbes.com/advisor/business/remote-work-
statistics/#:~:text=As%20of%202023%2C%2012.7%25%20of,normalization%20of%20re
mote%20work%20environments.

Hargrave, M. (2023, May 8). Berkshire Hathway: What It Is, Market Cap, and Who Owns It.
Retrieved from Investopedia:
https://www.investopedia.com/terms/b/berkshirehathaway.asp

Hathaway, B. (2023). Berkshire Hathaway Subsidiaries.

MarketBeat. (2023, October 10). Berkshire Hathaway Competitors. Retrieved from

MarketBeat:
https://www.marketbeat.com/stocks/NYSE/BRK-A/competitors-and-
alternatives/#:~:text=The%20main%20competitors%20of%20Berkshire,Financial%20Ser
vices%20Group%20(HIG).

MarketLine. (2023). Berkshire Hathaway Inc. SWOT Analysis. MarketLine.

MarketLine. (2023, 01 21). GEICO MarketLine Company Profile. Retrieved from
https://eds.s.ebscohost.com/eds/pdfviewer/pdfviewer?vid=2&sid=44f940ba-3d84-
4e9386a0-6690459ef152%40redis

MiNTEL. (2023). Build Your Own Car Insurance. South Korea: MiNTEL.

Profile - Warren Buffet. (2023, 10 28). Retrieved from Frobes.com:

https://www.forbes.com/profile/warren-buffett/?sh=ee4ecd846398

Rivelli, E. (2022, 08 24). US Commuting Facts & Statistics. Retrieved from Bankrate.com:
https://www.bankrate.com/insurance/car/commuting-facts-statistics/

Robinson, D. (2023, 09 11). MarketWatch Guides - Benefit of Using Car Insurance Apps.
Retrieved from MarketWatch.com:
https://www.marketwatch.com/guides/insuranceservices/guide-to-the-best-car-
insurance-apps/

Robinson, D. (2023, 09 08). MarketWatch Guides - How Does Pay-per-mile Care Insurance
Work? Retrieved from marketwatch.com:
https://www.marketwatch.com/guides/insurance-services/pay-per-mile-
insurance/#:~:text=If%20you%20usually%20drive%20fewer,to%20save%20you%20muc
h%20money.

Roush, T. (2023, February 25). Warren Buffett Letter to Shareholders: Berkshire Hathaway
Posts Losses - But Remains Optimistic. Retrieved from Forbes.com:
https://eds.s.ebscohost.com/eds/detail/detail?vid=7&sid=b26afa1e-647a-4bdc-
8e289cb55b7379ab
%40redis&bdata=JkF1dGhUeXBlPWlwLHNzbyZzaXRlPWVkcy1saXZlJn
Njb3BlPXNpdGU%3d#AN=162080974&db=buh

Samuel, N. (2023, 10 09). Why Warren Buffet Loves Insurance Compnaies: An Ivestigation.
Retrieved from PicturePerfect Portfolios.com:
https://pictureperfectportfolios.com/whywarren-buffett-loves-insurance-companies-an-
 investigation/#:~:text=Another%20aspect%20that%20attracts%20Buffett,the%20risk
%20 of%20financial%20distress.

Seybold Report. (2022). HP Buys Poly and Gets Major Boost from Berkshire Hathaway.
Seybold Report: Analyzing Publishing Technologies, 2-4.

Son, H. (2021, 01 05). Haven, the Amazon-Berkshire-JPMorgan venture to disrupt health

care, is disbanding after 3 years. CNBC.