Selling auto insurance in the US is ultra-competitive. In my opinion, car insurer primarily competes on rates (cost of car insurance) and service quality (like how easy and fast claims are made). A few insurer also create strong brand for this commodity product in order to differentiate their auto insurance. Lastly product innovation through unique packaging of insurance (auto insurance combined with auto insurance for pet, or certain home insurance) allow some players to create a differentiated product.
I've long been facinated by the story of GEICO. This stock was recommended by a very young Buffett in 1951, See page 25 of the annual report for the article and a picture of young buffett.
One of GEICO's competitor is Progressive. Both companies have very strong brand names in US and Canada partly due to the agressive investments to acquire and retain policies. However, after watching numerous advertisement by different insurance company, i must concede that only GEICO's adverts make u want to pick up the phone to go buy some insurance.
Let me know what u think.
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