Word: premiums
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Dates: during 1970-1979
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Once upon a quite recent time, the staid insurance industry had a Cinderella firm called Government Employees Insurance Co. (GEICO). By charging low premium rates, GEICO skipped past older firms to become the fifth largest auto insurer in the land. Investors from far and wide flocked to buy a piece of GEICO, bidding its stock up to more than $60 a share. Then Cinderella turned into a pumpkin...
Costly Pullout. For weeks Wallach has been phoning executives of other insurance companies to persuade them to reinsure 40% of GEICO'S policies and pay GEICO $26 million in cash commissions in return for a share of future premium income. He also sought their agreement to buy whatever part of a planned $75 million offering of GEICO convertible preferred stock the company's present shareholders do not purchase (shareholders must approve the offering at a meeting next week). By late June, Wallach had rounded up enough pledges to put off a deadline he had once set for moving...
...GEICO get into such a mess? Founded in Texas in 1936, GEICO from the start sold policies directly to customers. By doing without agents it was able to set premiums as much as 25% below what competitors charged. Initially, too, it insured only federal, state and municipal government ernployees-a responsible, low-risk group. So it was one of the very few insurers that actually made a profit on underwriting (premium income matched against claims payments) as well as on investments...
Secretaries find single-element typewriters faster, and the machines have fewer moving parts to maintain. From IBM's point of view, of course, their real attraction is profitability. Less labor is involved in the manufacture of the Selectric, yet it sells for a premium price -$630-$840. All of IBM's new rivals sell in the $650-$700 range. Now, though the company denies it, IBM appears to be withdrawing gradually from the ordinary electric typewriter market. It is a move that in the long run may help spell the end of the familiar, jammable typewriter. Another innovation...
...memory still pains, Humphrey recalls Georgia's Richard Russell referring to him as "a damn fool." Humphrey's insecurity and ambition, his need for approval made ostracism, indeed, any sort of slight, unendurable. He never forgot the experience. From then on, Humphrey placed an unacceptably high premium on approval. In the end, it was this that stopped the energetic, engaging and gregarious Midwesterner just short of fulfilling his dream...