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CONTENTS
Financial Highlights
Letters to Shareholders
Insurance Issues
Selected Financial Data
Business Segments
Managements Discussion and
Analysis
Financial Statements
Directors and Officers
GEICO Corporation
One GEICO Plaza
Washington, D.C. 20076-0001
Telephone (301) 986-3000
GEICO Corporation (the Corporation
Iy an insurance organization whos(
sidiary, Government Employee
Company (GEICO), is a mdtiple-line
casualty insurer currently engaged i]
ferred-risk private passenger automol
for government employees and militz
and homeowners and other lines of
all qualified applicants. GEICO Gene
Company (GGIC), a subsidiary of C
private passenger automobile insul
ferred-risk applicants other than go~
ployees and military personnel. GEI(
Company (GI), also a subsidiary of C
standard-risk private passenger au
motorcycle insurance with emphasis
to military personnel. Criterit
Company (Criterion Casualty), a sub
writes nonstandard-risk private pa!
mobile insurance. Southern Herita
Company (SHIC), acquired by the C
1991, writes preferred-risk auto and c
lines insurance through indepen
Merastar Insurance Company (MIC),
by the Corporation in 1991, writes F
ferred-risk auto insurance and other:
for individuals who are employees
employer. Resolute Reinsurance Cor
sidiary of Resolute Group, Inc., in tur
of the Corporation, wrote property
reinsurance in the domestic and inter
kets until late 1987 when the Compa
writing new and renewal reinsure
State Life Insurance Company (Gal
subsidiary of GEICO, offers consume
insurance products. Criterion Li:
Company, a subsidiary formed by G
writes structured settlement annuitie
erty and casualty affiliates.
Employees Financial Corporation (G
sidiary of GEICO, engages in secur
and business lending, loan servicing i
banking. The Corporation and its su
sometimes referred to as the Compa
port.
I
FINANCIAL HIGHLIGHTS
P
n thousands, except per share data)
1
remiums ......................................................................
et investment income (pretax) ................................
et investment income (aftertax) ..............................
Realized gains (pretm) ................................................
Realized gains (afterta.x) .............................................
Net income ....................................................................
Weighted average shares (fully diluted) ..................
Net income per share ..................................................
Dividends paid per common share ...........................
Asets .............................................................................
Shareholders' equi~ ............................... ...... ... ..... .... ...
Common shares outstanding .....................................
Book value per share .................. .................................
Return on equity (three-year rolling),,,,., ..................
$ 1,888,368
$ 191,226
$ 161,510
$ 29,331
$ 19,389
$ 196,380
14,571
$ 13.48
$ 2.28
$ 4,085,839
$ 1,184,261
14,209
$ 83.34
24.6%
jHARE RESULTS PROPERTY AND CASUALTY
I Net Income
~ Aftefim Realized Gains
87 88 89 90 91
1991 1990 1989 1988 1987
POLICYHOLDERS SURPLUS
AND GEICO CORPORATION
SHAREHOLDERS EQUITY
(MILLIoNs OF DOLLARS)
K Shareholders Equity
K Policyholders Surplus
900
~
87 88 89 90 91
$ 1,692,518
$ 177,087
$ 152,456
$ 19,587
$ 13,002
$ 208,441
15,279
$ 13.64
$ 2.00
$ 3,575,940
$ 970,008
14,851
$ 65.32
27.8%
$ 1,621,361
$ 152,422
$ 134,862
$ 109,133
$ 73,754
$ 213,053
15,504
$ 13.74
$ 1.80
$ 3,434,372
$ 898,135
15,176
$ 59.18
29,7%
VALUE PER SHARE
AND RETURN ON EQUITY
K Book Value Per Share
K Return on Equity
(three-yearrolling)
$90
75
A
87 88 89 90 91
$ 1,548,989
$ 143,502
$ 125,441
$ 82,351
$ 54,595
$ 189,038
15,861
$ 11.92
$ 1.64
$ 3,060,551
$ 707,390
15,440
$ 45.82
34.1%
$ 1,429,208
$ 130,691
$ 116,200
$ 42,019
$
27,731
$ 177,914
16,673
$ 10.67
$ 1.36
$ 3,012,541
$ 634,678
16,199
$ 39.18
37.7%
COMBINED Loss AND
EXPENSE RATIOS
(AFTER POLICYHOLDER DIVIDENDS)
K Industry
(Source A.M.Best,1991
estimated)
~ GEICO Corporation
(1987and1988adjusted
for theeffectof converting
tosix-monthpremiums)
110%
87 88 89 90 91
To OUR SHAREHOLDERS
I usually commence this letter by describing in
some detail the financial results summarized on
page 1, This year I will start with something more
important,
Over the past several years, we have made
steady progress in improving customer service, as
noted in the adjoining charts. But we believe much
more improvement is possible if we make a total
commitment to achieve significant and measurable
gains in the quality of our service as perceived by
our customers. To accomplish this, we have
launched a Quality Improvement Process intended
to develop throughout our organization a total
commitment to be the best at what we do and
then find ways to do it better. We believe this total
commitment to quality is imperative if we are to
remain competitive.
Last year I wrote you about the five business
disciplines which we have followed for many
years. We will continue to adhere to all of those
disciplines which include: maintain a disciplined
balance sheet, manage to an underwriting profit,
be the low cost provider, and invest for total re-
turn. But increased emphasis will be on the first,
which is: be fanatics for good service.
Some might say that we cant afford to empha-
size service and quality and also be the low cost
provider of insurance services. We dont think we
can afford not to be the best. A total quality ap-
proach to our business will lead to better satisfied
policyholders and associates, reduced costs, and an
improved bottom line. That resdt surely leads to
greater value for our shareholders. We believe all
three of these constituent groups will see increas-
ingly positive restik from our efforts as we make
progress in our total quality improvement process.
It is not obvious but 1991 was one of our best
years ever as we built shareholder value. Net in-
come per share was $13.48 compared to $13.64 in
1990 and net income was $196.4 million, down
from $208.4 million in the prior year. Realized in-
vestment gaim after tax of $19.4 million were mod-
estly ahead of 1990 but unrealized appreciation of
$183.1 million at the end of 1991 was far ahead!
Unrealized appreciation, of course, is reflected on-
ly in shareholders equity, not in the income state-
ment.
The comparison of financial results between the
past two years is further confused by the fact that
our 1990 results benefited from a one-time fresh
start tax adjustment. This adjustment cosmet
ly increased 1990 income by $22.2 million or $
per share. Also 1991 results include charges fo
centive compensation that may be paid out ir
ture years and which fluctuate with the Compa
Common Stock price or investment performs :
Those charges, which reflect our conservative
counting practices, were $1.22 per share in 1
and $.26 per share in 1990.
The operating and financial results of our
property and casuaIty companies were outsta
ing. They include results for the part of the ]
that we owned Southern Heritage and Mera:
Insurance Companies, as described on page 11.
believe both of these companies will become m
vahrable in the future, Our property and casut
insurance operations achieved a consolida
statutory underwriting ratio of 96.4%, after poli
holder dividends, as they also did in 1990. We
not routinely pay dividends to policyholders as
strive for the lowest possible premium rate e
year, but we chose to decline a policyholder d
dend for certain states in 1991 because underw
ing results were more favorable than we had an
ipated. This shotid result in improved policy ~
sistency and new sales in these states.
The Companys auto insurance results benefi
from the publics improved driving performs
resulting in little or no growth in auto claims
quency. Paradoxically, weather-related incur
losses for property insurance were high beta
1991 was our second worst year for catastro]
losses.
Property and casualty earned premiums w
up 11.6% over 1990, a result of strong pol
growth with only modest rate increases. Po]
growth for all voluntary product lines combil
(but excluding the policies of the two purcha
subsidiaries) was 9.0% for the 12 months end
December, 1991. This was the strongest pol
growth that we have experienced in recent yea
Aftertax net investment income was $161.5 I
lion, up 5.9% from $152,5 million in 1990, Fall
interest rates and declining yields contribute
I
the modest growth in investment income. We m
sure investment management performce on a
tal return basis that includes realized and unre
ized gain or loss over a rolling three-year peri
Vice Chairman Lou Simpson discusses our o
standing investment results in his letter.
SATISFACTION WITH
GEICO POLICYSERVICE
90
80
70
60
50
87 88 89 90 91
SATISFACTION WITH
GEICO CLAIM SERVICE
87 88 89 90 91
Return on equity (ROE) was 24.6%, also mea-
sured over a three-year period. Shareholders equi-
ty increased 22.1% over 1990, to $1,184.3 million,
largely because of the significant increase in unre-
alized appreciation in the portfolio.
As we reported earlier, GEICO Corporation is-
sued $100 million of 9.15% Debentures due 2021
for the purpose of paying off higher-rate long-term
debt and to pay maturing short-term debt,
Standard & Poors and Moodys both assigned fa-
vorable ratings. At the end of 1991, your
Companys long-term corporate debt to capital ra-
tio was an acceptable 14.5%, down slightly from
the 1990 level.
We negotiated with a prospective buyer for our
life company, Garden State Life Insurance
Company, but the letter of intent expired in late
1991. Negotiations were resumed in February 1992.
We chartered Criterion Life Insurance Company at
year-end 1991 to assume the structured settlement
annuity business of Garden State.
No prospective buyer has been located for
GEFCO, our finance company; consequently, we
continue to shrink that business. GEFCO had a net
10SSof $748thousand in 1991.
Each year since 1988 I have found it necessary to
discuss in this letter the situation in California. We
have discussed the causes of Proposition 103 and
the confusing deve~opments since the Proposition
was passed. An elected insurance commissioner
took office January 1, 1991. His most recent arbi-
trary act was to issue orders to individual
California auto insurers to make policyholder re-
funds based on 1989 premiums. GEICO received
an order to refund $56.2 million of premium, or
39.4% of the total premium earned by GEICO in
California for 1989. That proposed refund amount
exceeds the total underwriting profit from
GEICOS entire U.S. operations in 1989. GEICO
will pursue all available legal remedies to resist
this unreasonable order. You may remember that
the Corporation in 1989 and 1990 took charges
against earnings totalling $27.7 million for the po-
tentiaf refund of premium in California. These 1991
results do not include any additional charge
against earnings for that purpose.
On February 26,1992 your Board of Directors in-
creased the quarterly cash dividend on Common
Stock to $.75 per share, up 31% over the dividend
paid in each of the previous four quarters. The
Board of Directors also proposed an increase in the
number of authorized shares of Common Stock
from 60 million to 150 million and a five-for-one
stock split. The proposed increase in authorized
shares is subject to shareholder approval at the
Corporations annual meeting.
We were deeply saddened by the death on July
30,1991 of William K. Jacobs, Jr., a member of our
Board of Directors from 1948 until his retirement in
1978, and ~ honorary director since then. Bill will
be greatly missed,
We discuss on pages 6 and 7 several auto/traffic
safety and loss reduction issues, We do this to help
inform as many people as possible about these im-
portant issues and to let you know about critical
activities in which we invest both time and money.
OUTLOOK FOR 1992 AND BEYOND. While the
outlook for the national economy is less than rosy,
we believe we can continue to achieve restits gen-
erally satisfactory to you. We are always subject to
a long list of uncertainties, such as the economy
and its impact on driving, accident frequency and
severity, new car sales and other events such as
weather-related catastrophes that can affect our re-
sults. And to the list of uncertainties you can add
actions or inactions by regulators and legislators
and demands by consumers. Despite these chal-
lenges we have set goals to achieve an underwrit-
ing gain in 1992, modest policy and premium
growth and a total commitment to improving ser-
vice to our customers... who support us all.
William B. Snyder
Chairman
February 26,1992
e
INVESTMENTS
Your Investment portfolio had a good 1991.
Aftertax total return on the total portfolio was
14.7%. GEICOS common stocks had an aftertax to-
tal return of 36.5% compared with the S&Ps 20,3%.
The fixed income portion also performed well even
though the bond portfolio has a relatively short
maturity. Over the last three years GEICOS com-
mon stocks returned 17.1 % annually after tax, com-
pared to 12.9% for the S&P 500, while the entire
portfolio appreciated 10.3% annually after tax. We
realized $19.4 million after tax in capital gains in
1991 while the unrealized gain (net of deferred tax-
es) for the equity portfolio increased $155.7 million.
Aftertax investment income grew 5.9% to $161.5
million, although we used $116.3 million to repur-
chase GEICO Corporation shares. The largest net
changes in the portfolio during the year were the
net purchases of $347 million of U.S. Treasuries
and Agencies and the net sales of $62 million of
common stocks.
In the 1986 GEICO annual report, I outlined our
investment approach toward investing in equities.
Since 1986, financial markets have been turbulent,
with stocks particularly volatile as characterimd by
major one day declines in 1987 and 1989.
Leveraged buy-out transactions have all but disap-
peared, the junk bond market has had severe prob-
lems, corporate bankruptcies have multiplied, and
real estate values (particularly commercial) have
declined sharply. Despite these dramatic and pro-
found changes, this investment team believes those
1986 principles remain relevant. We have reprint-
ed them on the opposite page.
While these guidelines are easy to write about in
theory, we find it challenging to apply them in
practice today. Most high return businesses sell at
a very high price relative to earnings and long term
growth prospects, and as a resdt there is a shrink-
ing number of investments which meet our criteria.
Our response to the current environment has
been to further emphasize our most basic princi-
ples of concentration, independent thinking, and
long-term ownership. GEICOS portfolio now con-
sists of eight stocks compared to thirty-six stocks
five years ago. Ordy two of the stocks are part of
the Dow Jones industries and our largest holding
was not part of the S&P 500 until year-end 1991.
Finally, of the eight stocks in the portfolio at year-
end, weve owned six for at least two years, Since
we dont see many good investment ideas, we
:OMMON STOCK ANNUALIZED
OTAL RATE OF RETURN
iI=TER TAX
rHIRTY -SIX MONTHS ENDING)
I
9 GEICO Comons
R sar 500
87 88 89 90 91
INVESTED ASSETS
(MILLIONS OF DOLLARS)
H Short-termInvestments
K Equity Securities
I FixedMaturities
87 88 89 90 91
GEICOS EQUITY
INVESTMENT APPROACH
Since the performance of GEICOS common stock
portfolio has contributed significantly to the in-
crease in value of your investment in GEICO, I
thought you might be interested in learning more
about our investment approach. In an abbreviated
form, here are some of our guidelines:
1. ~irzk independerztly, We try to be skeptical of con-
ventional wisdom and to avoid the waves of irra-
tional behavior and emotion that periodically en-
gulf Wall Street. Such behavior often leads to ex-
cessive prices and, eventually, permanent loss of
capital. We dont ignore unpopular companies. On
the contrary, such situations often present the
greatest opporttities.
2. Invest in high-return businesses run for the share-
holders. Over the long run appreciation in share
prices is most directly related to the return the
company earns on its shareholders investment.
Cash flow, which is more difficult to manipulate
than reported earnings, is a useful additional yard-
stick. Companies that cannot earn positive free
cash flow (cash flow after capital expenditures,
working capital needs and dividends) chew up
owners equity and are continually forced to raise
new capital. We try to identify companies that ap-
pear able to sustain above-average profitability.
Most companies cannot because competition pre-
vents it.
Many executives have priorities other than max-
imizing the value of their enterprises for owners,
such as expanding corporate empires. At GEICO
we ask the following questions in evaluating man-
agement 1. Does management have a substantial
stake in the stock of the company? 2. Is manage-
ment straightforward in dealings with the owners?
(We look for managers who treat us as partners in
the business and inform us frankly of problems as
well m good news.) 3. Is management wi~ing to di-
vest unprofitable operations? 4. Does management
use excess cash to repurchase shares?
The last may be the most important. Managers
who run a profitable business often use excess cash
to expand into less profitable endeavors.
Repurchase of shares is in many cases a much
more advantageous use of surplus resources. At
GEICO, we practice what we preach we concen-
trate on our core business, and over the past eight
years have reduced shares outstanding from over
34 million to under 17 million,
3. Pay only a reasonable price, even for an excellent
business. We try to be disciplined in the price we
pay for ownership even in a demonstrably superi-
or business. Even the worlds greatest business is
not a good investment if the price is too high. The
ratio of price to earnings and its inverse, the earn-
ings yield, are useful gauges in valuing a company,
as is the ratio of price to free cash flow. A helpful
comparison is the earnings yield of a company ver-
sus the return on a risk-free long-term United
States Government obligation,
4. Invest for the long-term. Attempting to guess
short-term swings in individual stocks, the stock
market or the economy is not likely to produce
consistently good results. Short-term develop-
ments are too unpredictable. On the other hand,
shares of quality companies run for the sharehold-
ers stand an excellent chance of providing above-
average returns to investors over the long-term.
Furthermore, moving in and out of stocks fre-
quently has two major disadvantages that will sub-
stantially diminish results: transaction costs and
taxes. Capital will grow more rapidly if earnings
compound with as few interruptions for commis-
sions and tax bites as possible,
5. Do not diversify excessively. An investor is not like-
ly to obtain superior results by buying a broad
cross-section of the market the more diversifica-
tion, the more performance is likely to be average,
at best. We concentrate our holdings in a few com-
panies that meet our investment criteria in the be-
lief that we have a chance at superior results only
if we take risks intelligently, when the risk-reward
ratio is favorable to us. Good investment ideas,
that is, companies that meet our criteria, are diffi-
ctit to find. When we think we have found one, we
make a large commitment. The five largest hold-
ings at GEICO account for over 50% of your equity
portfolio.
(Reprintedflom the 1986 GEICO Corporation Annual
Report to Shareholders)
Insurance IssuEs
NO-FAULT AUTO INSURANCE. A recent
study by Rand Corporations Institute for Civil
Justice confirmed what the insurance industry has
said for years: a carefully designed no-fault auto
insurance system can cut auto insurance costs sig-
nificantly.
Under no-fault, an insured driver is compensat-
ed for accident-related injuries by his or her own
insurance company, regardless of fault in a crash.
In return for this guaranteed benefit, the insured
person gives up the right to sue unless there are se-
rious injuries.
By keeping accident injury cases out of the
courts, auto ins urance costs are reduced, premi-
ums are contained, claims are settled more quickly
and accident victims are not forced to share 30 per-
cent or more of their settlements with attorneys
and pay other significant costs.
GEICO supports no-fault insurance as the best
solution to rising auto insurance premiums.
INSURANCE FRAUD. If you think of insurance
fraud as a victimless crime, think again. Phoney
insurance claims cost an estimated $16 billion dol-
lars annually. Who foots the bill? You and every
.
other consumer who must pay higher auto in
ante premiums to cover the cost.
GEICO and other insurers have established
cial investigation units to detect and prevent
ment of fraudulent claims. But their power tc
ter criminal activity stops there. Thats 1
GEICO encourages legislatures to establish f]
bureaus within their state insurance departm[
Fraud bureaus have prosecutorial powers, the,
giving anti-fraud efforts the force of law.
AIR BAGS. After more than two decade
prodding by insurers and safety organizations,
frontal air bags in all vehicles will become a re
by 1998. The transportation bill passed
Congress in 1991 mandates driver- and passen
side air bags in all passenger cars by Septemb
1997, and in all light trucks and vans by Septen
1,1998.
Despite some isolated problems with air ba[
duced skin abrasions and minor hot gas burro
bags combined with seat belts continue to pro
the best crash protection available, Recent stu
by the Insurance Institute for Highway Sa
found that driver deaths in air bag-equipped
..~-~~.992 MODELS WITH AIR BAGS
o~tie~ollowing 1992 model cars have driver-side air bags as standard equipment.
~ose w~ti optional driver-side W bags are marked with a cross (~).
k
--
.c_ma_Legend*
-->Acura NSX
CmLVigor
tiomeo, all models
~~udi.aUmodels*
E~, all models
==B_~t _~y,all models
B_uick LeSabre, Park Ave.
til~ Riviera
@ck Roadmaster
Cadillac, all models
except Brougham
Chevrolet Beretta
Chevrolet Camaro
~evrolet Caprice
Chevrolet Corsica
Chevrolet Corvette
Chrysler 5th Avenue
Chrysler Imperial
Chrysler LeBaron
Chrysler New Yorker
Chrysler Town & Country
Dodge Caravan
Dodge Daytona
Dodge Dynasty
Dodge Grand Caravan
Dodge Shadow
Dodge Spirit
Dodge Stealth
Ford Aerostar
Ford Crown Vie{
Ford Mustang
Ford Taurus*
Ford Tempoe
Geo Metro Conv
Geo Storm
Honda Accord
Honda Civic
Honda Prelude*
Infiniti M30
~28percent lower than in cars equipped only ~
[manual lap-harness safety belts.
31C0 encourages anyone purchasing anew car
mist on an air bag-equipped model. The chart
~w shows which models have air bags for 1992.
?UNK DRIVING. Despite years of anti-drunk
ving campaigns, nearly half of all traffic fatali-
;: some 22,000 each year are alcohol-relat-
But results are better than before.
One proven way to help get drunks off the road
d keep them off is administrative license revoca- <
11(ALR) laws. ALR laws allow a police officer to
:tiscate on the spot the drivers license of anyone
1. 0 fails or refuses a sobriety test. GEICO sup-
rts the enactment of ALR laws in all states and
courages strict enforcement of such laws.
In addition GEICO continues to work with a
Dadrange of groups to promote anti-drunk driv-
~programs in the community, On the local level,
s company works with groups like the Nassau
d Suffolk County (N.Y.) Stop DWP programs.
I the natioti level, GEICO participates in NETS,
s Network of Employers for Traffic Safety, an or-
nization that helps em~lovers establish or en- j
hance alcohol and safety belt education programs
in the workplace.
ANTILOCK BRAKES. Technology has come to
the aid of those unfortunate drivers who must
slam on their car brakes in an emergency. Anti-
lock brakes, first developed for aircraft in the
1950s, will be available on more and more cars in
the coming years.
Antilock brakes improve driving safety by pre-
venting brake lock-up and skidding, especially on
wet, slippe~ roads. When car wheels begin to lock
after hard braking, antilocks take over and pump
the brakes many times a second. The result is
maximum braking and increased control.
A number of upscale foreign car manufacturers
already offer antilock brakes as standard equip-
ment on all models, and theyre beginning to be
featured on popular priced cars, too. General
Motors has announced that antilock brakes will be
standard on all GM cars by the rnid-1990s. Other
automakers are expected to follow suit.
To increase driving safety, GEICO urges all new
cm buyers to consider models with antiiock brakes.
hose with passenger-side airbags standard or optional
5
models
5
models
11models*
9*
K-5 Miata
r
-7Convertible
s, all models*
Capri
Mercury Grand
Marquis*
Mercury Sable*
Mercury Topaze
Mitsubishi 3000GT
Mitsubishi Diamante
Nissan 300ZX
Nissan 300ZX 2+2
Nissan Maximae
Nissan Sentra Coupe
are marked with

a star (*).
Oldsmobile 88,98
Oldsmobile CustomCruiser
Oldsmobile Toronado
Plymouth Acclaim
Plymouth Grand Voyager
Plymouth Sundance
Plymouth Voyager
Pontiac Bonneville*
Pontiac Firebird
Porsche, all models*
i:
-.- _._
Rolls Royce, all models
Saab, all models
Subaru Legacy
Subaru SVX
Toyota Carnry
Toyota Celica, MR2 -
Toyota Previa
Toyota Supra
Volkswagen Cabriolet,
Volvo, all models

SELECTED FINANCIAL DATA

GEICO CORPORATION
(In thousands, except per share data)
OPERATING RESULTS
Premiums ..............................................................................................
Net investment income .......................................................................
Realized gains (losses) oninvestients .............................................
Interest on loans receivable ................................................................
Equity in earnings of unconsolidated affiliates ...............................
Other revenue .......................................................................................
Total revenue ........................................................................................
Total benefits and expemes ................................................................
Net income ............................................................................................
WEIGHTED AVERAGE SHARES OUTSTANDING
Fully dfluted ..........................................................................................
Primq ..................................................................................................
PER SHARE RESULTS
Net income, fu~y diluted ....................................................................
Net income, ptim~ ................................. .............. .............................
Common Stock dividends ...................................................................
FINANCIAL CONDITION
Assets .....................................................................................................
Debt ........................................................................................................
Comonstieholders' equi~ ...........................................................
Common shares outstanding (fuHy converted) ...............................
Book value per share (futiy converted) .............................................
SIGNIFICANT STATUTORY INDICATORS
(In thousands, except ratios)
PROPERTY AND CASUAL~ OPERATIONS*
Surplus for protection of pohcyholders ...........................................
Ratio of twelve months written premiums
to swplus ...........................................................................................
Loss ratio ...................................................................................... .........
Expense ratio .................................................. .......................................
Underwriting ratio ............................................... .. ..............................
Underwriting ratio after pohcyholder dividends ...........................
Adjusted ratios: ........................... ......... ........... ............................. ..... ...
Expeme ratio ......................................................................................
Underwriting ratio ...........................................................................-
1991
$1,888,368
191,226
29,331
20,019
4,139
13,944
2,147,027
1,950,647
$ 196,380
14,571
14,571
$ 13.48
$ 13.48
$ 2.28
$4,085,839
$ 299,081
$1,184,261
14,209
$ 83.34
$1,104,564
1.21
79.0%
15.9%
94.9%
96.4%
1990
$1,692,518
177,087
19,587
23,606
3,303
18,776
1,934,877
1,726,436
$ 208,441
15,279
15,279
$ 13.64
$ 13.64
$ 2.00
$3,575,940
$ 280,799
$ 970,008
14,851
$ 65.32
$ 811,628
2.1:1
80.8%
15.2%
96.0%
96.4%
1989
$1,621,361
152,422
109,133
29,215
10,462
16,796
1,939,389
1,726,336
$ 213,053
15,504
15,504
$ 13.74
$ 13.74
$ 1.80
$3,434,372
$ 302,152
$ 898,135
15,176
$ 59.18
$ 814,806
2.0:1
81,8%
15.2%
97.0%
97.4%
1988
$1,548,989
143,502
82,351
31,159
11,246
14,129
1,831,376
1,642,338
$ 189,038
15,861
15,861
$ 11.92
$ 11.92
$ 1.64
$3,060,551
$ 299,955
$ 707,390
15,440
$ 45.82
$ 650,880
1.9:1
83.2%
17.5%
100.7%
100.7%
14.6%
97.8%
*Proper~ and Casualty includes Government Employees Insurance Company, GEICO General, GEICO Indemnity, Criterion Casualty, Merast?
Southern Heritage and Resolute.
Expense ratios are calculated using underwriting expenses less net service charges, as related to premiums written.
Adjusted ratios are calculated to eliminate the effect of converting to six-month premiums in 1988 and 1987.
1985
$1,073,937
124,627
142,549
25,124
2,774
25,361
1984 1983 1982
$ 870,646
113,692
44,283
23,194
1,658
17,832
1,394,372
1,223,793
$ 170,579
18,430
18,430
$ 9.25
$ 9.25
$ 1.00
$2,539,416
$ 255,292
$ 515,636
17,697
$ 29.14
$ 583,000
2.0:1
87.9%
15.0%
102.9%
102.9%
1,071,305
939,992
$ 131,313
19,660
19,643
$ 6.68
$ 6.68
$ .88
$2,054,650
$ 249,768
$ 420,401
18,766
$ 22.40
$ 521,804
1.81
82.1%
15.6%
97.7%
97.7%
$ 768,174
100,871
21,034
22,512
974
11,248
924,813
$ 731,719
84,758
(39,797)
25,880
910
3,377
806,847
811,060
_ $ 113,753
21,172
21,144
$ 5.37
$ 5.38
$ .72
$1,913,273
$ 213,574
$ 405,439
20,393
$ 19.88
$ 480,028
1.6:1
76.9%
16.7%
93.6%
95.7%
757,999
$ 48,848
21,092
20,364
$ 2.32
$ 2.39
$ .56
$1,717,410
$ 215,014
$ 344,797
20,459
$ 16.85
$ 414,837
1.8:1
80.0%
15.6%
95.6%
95.6%
COMMON STOCK
The Corporations Common Stock is listed on both
the New York and Pacific Stock Exchanges, ticker
symbol GEC. Under Securities and Exchange
Commission rules, certain securities dealers are
permitted to make an over-the-counter market in
the Corporations stock. The number of holders of
record of the Corporations stock at January 31,
1992 Was 2,846.
The following table shows the quarterly high
and low prices for the stock m published in the tab-
ulation of the New York Stock Exchange
Composite Transactions. The table also shows div-
idends paid to shareholders of record in each quar-
ter of 1991and1990.
1991
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
1990
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Dividends
High Low Paid
.
$199 1/4
195 1/2
197 1/2
184
High
$169 1/2
163
162 1/2
154 7/8
$1871/4
184
175
156 1/2
Low
$125 3/4
134
145
142
$.57
.57
.57
.57
Dividends
Paid
$.50
.50
.50
.50
BUSINESS SEGMENTS
Edward H. UtIey
President, GEICO Corp.
Chairman and CEO,
GEICO Indemnity
PROPERTY AND CASUALTY
INSURANCE
Government Employees Insurance Company
GEICO General Insurance Company
GEICO Indemnity Company
Criterion Casualty Company
Southern Heritage Insurance Company
Merastar Insurance Company
The Corporations principal business is personal
lines property and casualty insurance, which is
provided to the insuring public through six affiliat-
ed companies. Government Employees Insurance
Company and GEICO General Insurance
Company, which both serve our primary market,
the preferred-risk customer, accounted for 90.8% of
the Corporations totaI premium revenue in 1991.
Government Employees Insurance Company
was founded in 1936 to provide private passenger
automobile insurance to government employees
and military personnel; in 1958 it began providing
insurance to other eIigible preferred-risk drivers. In
1987 it once again began to market new auto poli-
cies only to preferred-risk government employees
and military personnel and GEICO General
Insurance Company (GGIC) began to serve all oth-
er preferred-risk drivers.
In 1954 Government Employees Insurance
Company commenced offering other types of per-
sonal lines property insurance and now offers
homeowners, personal umbrella liability, boat-
owners, and fire insurance. This company is Ii-
censed and operates in the District of Columbia
and all states except New Jersey.
GGIC primarily writes private passenger auto
insurance but also offers insurance for protection
OIza M. Nicely
President and CEO, GEICO
~mas W. Crawford
sident, Southern Heritage
in Kaltman
;ident, Merastar
20%over 1990 and homeowners new policy sales
were up 15%; however, the key to profitable policy
growth is the retention of current policyholders, es-
pecially seasoned drivers with their generally low-
er loss experience. One measure of retention suc-
cess is the percentage of policyholders who are of-
fered and accept renewal. In 1991 that percentage
for GEICO preferred-risk auto was 93.1%, a mod-
est increase from 1990 but a good indication of the
level of policyholders satisfaction with GEICO ser-
vice.
In 1991 GEICO achieved a statutory underwrit-
ing ratio of 95.7% (after a $27.3 million policyhold-
er dividend) compared to 95.9% in the prior year
(when a $6.0 million dividend was declared),
GEICO produced a GAAP underwriting gain (after
policyholder dividends) of $78.2 million in 1991,
up from $58.2 million in 1990.
In April 1991 the Corporation purchased
Southern Heritage Insurance Company (SHIC)
which writes preferred-risk personal lines through
independent agents, the only property and casual-
ty company in the GEICO Group of companies to
do so. SHIC wrote $10.4 million in premium in
1991, up from $7.7 million in 1990, while operating
most of the year in only three states. SHIC is now
licensed in seven states and expects to be licensed
in approximately 12 states by the end of 1992. This
company had a GAAP underwriting loss of $.9
million for the nine months during 1991 that it was
part of the GEICO Group.
The Corporation also purchased Merastar
Insurance Company (MIC) in the second quarter,
completing the transaction June 21. MIC markets
primarily to preferred-risk drivers who have a
common employer, using payroll deduction to col-
James M. Hitt
President, GEICO Indemnity
lect premiums. This company, which is licensed in
42 states and the District of Columbia, wrote $29.6
million in premium in 1991. For the approximately
six months it was part of the GEICO Group,
Merastar experienced a $2.0 million GAAP under-
writing loss.
GEICO Indemnity Company (GI) writes auto-
mobile insurance for standard risks, that is, those
individuals not meeting GEICOS preferred-risk
criteria, and also writes motorcycle insurance, GI
operates in the District of Columbia and all states
except Massachusetts, New Jersey and South
Carolina, Most voluntary new business (66 % in
1991) is acquired through GFRs who operate 95 of-
fices, primarily in the vicinity of military installa-
tions, in 34states.
Criterion Casualty, a GI subsidiq, offers non-
standard-risk automobile insurance to those not
qualifying for preferred or standard-risk insurance.
This product line also is offered principally
through GFRs. Criterion Casualty operates in 29
states.
GI, including Criterion Casualty, achieved a
GAAP underwriting gain of $8.0 million in 1991
compared to a gain of $3.3 million in 1990 (after
policyholder dividends). GI achieved strong
growth in the policy count in 1991 after experienc-
ing little or no growth in several prior years. Net
earned premium growth in 1991 was 5,7%. The in-
creased new business and policy growth reflects
GIs competitive prices and improved service.
The Corporations property and casualty statu-
tory underwriting ratio (after policyholder divi-
dends) was 96.4% in 1991 and also 96,4% in 1990,
The ratio in 1989 was 97.4%. Property and casualty
operations, including reinsurance, recorded a
GAAP underwriting gain (after policyholder divi-
dends) of $72.1 million in 1991. Underwriting gains
of $53.8million and $34.8 million (after policyhold-
er dividends and a provision for potential
California refunds) were recorded in 1990 and
1989, respectively.
,,
PRIVATE PASSENGER AUTOMOBILE
INSURANCE
The Corporations principal product line is private
passenger automobile insurance, accounting for
93.4% of the property and casualty earned prerni-
urn in 1991. Based on an A. M, Best report of pre-
miums written in 1990, the Corporation is the na-
Noel A. Chandonnet
Regional Vice President
Donald D. Messmer
Regional Vice President
tions fourth largest shareholder-owned provider
of such insurance. In 1991 automobile insurance
earned premiums, including service charges and
partial year results for SHIC and MIC, totaled
$1,741.0 million, up 11.0% from $1,568.2 rniIlion a
year earlier. Approximately 2.9 million automo-
biles were insured at the end of 1991.
Preferred-risk voluntary auto insurance rates
countrywide were increased in GEICO an average
of 4.7% during the year, compared to 2.8% in 1990.
The 1991 rates for involuntarily written policies in
GEICO increased an average of 9.1% countrywide
compared to 17.9% in the previous year.
New policy sales and retention of current poli-
cyholders resulted in a 7.6% growth during1991in
the GEICO and GI voIuntary auto policy counts
(excluding involuntary auto business and also ex-
cluding the additional policies acquired through
the purchase of the two new affiliates). Growth
was 4.3% in 1990.
The number of automobile claims reported to
GEICO and GI declined 1.1% in 1991, following in-
creases of 2.6% and 3.4% in 1990 and 1989, respec-
tively. While units insured in 1991 increased,
claims reported were slightly lower due to im-
proved claim frequency for physical damage cov-
erages. Incurred losses due to weather-related and
other catastrophes were essentially the same in
GEICO and GI as in the year before.
The cost of settling bodily injury claims contin-
ues to rise due largely to higher medical and med-
ical-related costs. Bodily injury claim costs in
GEICO increased approximately 7% in 1991 fol-
lowing increases of 7% in 1990 and 6% in 1989.
Costs associated with repairing damaged automo-
biles remained about the same in 1991 after in-
Robert M. Miller
Regional Vice President
id H. Pushman
crnal Vice President
<d L. Schindler
ional Vice President
than double 1990 incurred losses but well below
the record high catastrophe losses incurred in 1989.
OTHER PROPERTY AND CASUALTY LINES
In addition to its automobile and homeowners
lines, GEICO offers policies providing fire, boat,
yacht, accident and health, personal umbrella lia-
bility, and mechanical breakdown insurance (MBI).
MBI is a single premium coverage that provides
warranty protection for new automobiles. This
product incurred statutory underwriting losses of
$3.3 million in 1991 and $3.0 million in 1990. In
1991 all of these other lines accounted for less than
1.0% of property and casuaIty earned premiums.
SHIC and MIC also write small amounts of boat,
fire and personal umbrella liability coverage.
REINSURANCE
Resolute Group, Inc. reported a net loss of $4.4 mil-
lion in 1991 compared to a net loss of $2.4 million
in 1990. No new business has been written since
1987.
LIFE AND HEALTH INSURANCE
Garden State Lye Insurance Company
Criterion Lye Insurance Company
Life insurance operations are conducted through
Garden State Life Insurance Company. Since 1983,
the company has marketed fully underwritten in-
dividual term life insurance using direct response
methods involving both mail solicitations and ra-
dio and television advertisements. The total face
amount of new term life insurance written in 1991
was $1.5 billion and total life insurance in force at
William G. Griswold
Vice President, Proper~ Insurance
the end of the year stands at $6.6 billion before re-
duction for reinsurance ceded.
Criterion Life Insurance Company (Criterion)
was formed in December 1991 to offer single pre-
mium annuities to its property and casualty com-
pany affiliates. These annuities are used to fund
structured payouts of liability insurance claim set-
tlements. Garden State previously wrote this busi-
ness and in 1991 received $10.1 million from this
source, down from $11.0 million in 1990. All of
Garden States structured settlement annuity in
force business was assumed by Criterion on
December 31,1991.
Total pretium income was $23,0 million in 1991
and net income was $4.1 million compared to $3.4
million in the prior year.
Negotiations for the sale of Garden State Life
Insurance Company were terminated late in 1991.
Negotiations were resumed in February 1992.
FINANCE
Government EmployeesFinancial Corporation
Government Employees Financial Corporation
(GEFCO), headqu=tered in Denver, Colorado, en-
gages in secured consumer and business lending,
loan servicing and industrial banking. For 1991
GEFCO had a net loss of $.7 million, compared
with net income of $.3 million the prior year.
We continue to reduce operations at GEFCO as
we have concluded we cannot achieve a satisfacto-
ry return on our investment and no qualified buy-
er has come forth. We have substantially reduced
loans receivable. In 1990 we ceased accepting de-
posits in GEIBank, our industrial bank and, in
1991, we began to stilnk certificates of deposit by
resigning as trustee on Individual Retirement
Accounts and returning depositors money.
GEFCO paid approximately $27 million in divi-
dends to its parent GEICO in the last three years.
Capital will be reduced further as the business
shrinks.
.
MA
FIN
NAGEMENTS DISCU
IANCIAL CONDITION
SSION ANI
AND RESL
RESULTS OF OPERATIONS
REVENUE
Premiums Consolidated earned premiums in
1991 were $1,888.4 million, up 11.6% from a year
ago when premiums were $1,692,5 million,
Premiums in 1990 were up 4.4% over 1989.
Property and casualty premiums, which represent
99% of consolidated earned premiums, increased
11.2% in 1991 and 6,2% in 1990. This premium
growth rate reflects the effect of rate changes and
policy growth in the major product lines and the
purchase of two small subsidiaries. Preferred-risk
voluntary automobile rates in GEICO increased
4.7% and 2.8% in 1991 and 1990, respectively, while
GEICO homeowners rates decreased .6% in 1991
and 3.4 % in 1990. Voluntary policies-in-force, ex-
cluding the two recently purchased subsidiaries,
increased 9.0% in 1991 and 6.0% in 1990. The 1991
countrywide growth rate is the best that we have
experienced since 1985 and is the composite of
strong growth in several states and little or no
growth in states with doubtful potential for future
profitability. New business sales of voluntary poli-
cies were ahead of 1990 and renewal persistency
improved in GEICO and GI. Residual market (in-
voluntary business) premiums and policy counts
were lower than in 1990 a favorable result.
Life insurance premiums were $23.0 million in
1991 compared to $15.4 million in 1990. Premiums
in 1990 were reduced by $6.1 million reflecting the
premium paid to another insurance carrier to as-
sume the Companys Medicare Supplement busi-
ness. The sale had no effect on net income.
On November 8,1988 California voters passed
Proposition 103 which called for significant rate re-
ductions and certain changes in the states insur-
ance laws. The State Supreme Court delayed the ef-
fective date until legal arguments could be pre-
sented to determine the initiatives constitutionali-
ty. On May 4,1989, the State Supreme Court ruled,
among other things, that insurers must be allowed
to earn a fair and reasonable return on their in-
vestment.
In the second quarter of 1989 the Corporations
property and casualty insurance companies ap-
plied for an exemption from the rate rollbacks pur-
suant to the courts decision. It is managements
opinion that the application demonstrated that the
Companies rates do not produce a profit in excess
In January 1992 the Office of Administrative
Law (OAL) disapproved the Commissioners regu-
lations that attempted to implement Proposition
103s provisions on rate rollbacks and prior ap-
proval of rates stating that the regulations exceed
the Commissioners statutory authority. The
Governor has reversed the OAL and we await fur-
ther word from the Commissioner.
Other states have considered legislation to re-
duce insurance premium rates similar to California
Proposition 103. Future effects of any such legisla-
tion are uncertain and, as a result, some companies
have withdrawn from these markets. GEICO ana-
lyzes each situation as it arises to determine
whether it can continue to write business prof-
itably.
In Pennsylvania, a law became effective in July
of 1990 that imposes a rate freeze and requires rate
reductions of 10% or 22%, depending on the type
of coverage, for policies renewing after Jtiy 1,1990.
The Pennsylvania courts denied our request to stay
the implementation of the reductions. The industry
is pursuing legal remedies and will also pursue
legislative changes in an attempt to correct this
flawed legislation. In the meantime, the GEICO
Group is not writing any new business in the state.
Automobile earned premiums in Pennsylvania
were approximately $26.8 million in 1991.
Net Investment Income Consolidated pretax net
investment income increased 8.0% to $191.2 mil-
lion in 1991, up from $177,1 million in 1990, when
the increase was 16.2%. The increase in investment
income in 1991 reflects the growth in invested as-
sets and an increased allocation to taxable invest-
ments over the past two years. Aftertax net invest-
ment income was up only 5.9% to $161.5 million,
due to the shift to taxable investments. The invest-
ment portfolio no longer includes any below-in-
vestment-grade corporate bonds of a material
amount.
Realized Gains on Investments Pretax net realized
gains were $29.3 million in 1991, compared to $19.6
million in 1990 and $109.1 million in 1989. Realized
gains in 1991 included a $12.2 million gain on the
sale of RJR Nabisco high yield securities. The 1990
realized gains included $11.3 million from the sale
of Bond Investors Group, Inc. (BIG), a 20% owned
municipal bond guarantee insurance company.
Realized gains on investment sales are a result of
financial market conditions and can, therefore,
fluctuate widely from period to period. The com-
ponents of realized and unrealized gains and loss-
es on investments are detailed in Note D to the
financial statements.
Interest on Loans Receivable Interest on loans re-
ceivable decreased 15.2% to $20.0 million as
Government Employees Financial Corporation
(GEFCO), our finance subsidiary, is intentionally
reducing its loans receivable.
Equity in Earnings of Unconsolidated Affiliates
Earnings of unconsolidated affiliates, which me re-
flected in the consolidated financial statements us-
ing the equity method of accounting, increased to
W.1 million for the year compared to $3.3 million
in 1990 primarily because AVEMCO, a 34% owned
general aviation insurance company, realized large
gains in the first quarter of 1991. Equity in affili-
ates earnings of $10.5 million in 1989 included $6.5
million of equity in earnings of BIG which was sold
in January 1990.
Other Revenue Other revenue was $13.9 million
in 1991, down from $18.8 million in 1990 and $16.8
million in 1989. This category of revenue consists
primarily of sales of timeshare intervals, comrnis-
siom, and motor club dues.
BENEFITS AND EXPENSES
Losses and loss adjustment expenses incurred in-
creased 9.2% to $1,450.1 million in 1991, up from
$1,328.5 million in 1990 and $1,265.2 million in
1989. The loss ratio for property and casualty in-
surance, which measures the portion of earned
premium paid or reserved for losses and related
claims handling expenses, was 79.0% in 1991 com-
pared to 80.8% a year ago and 81.8% in 1989,
Weather-related and other catastrophe losses were
much higher than 1990 but not as high as 1989,
Auto claims frequency is flat or down from 1990
for all coverages (except uninsured motorists). The
rate of increase in average auto claims severity for
injury coverages is no greater than last year at this
time. Physical damage severity has not increased.
Life benefits and interest on policyholders funds
increased to $19.7 million from $13.1 million in
1990. Life benefits were reduced by $6.0 million in
1990 due to the assumption of the Medicare
Supplement business by another insurance carrier.
Policy acquisition expenses increased 16.3% to
$162.1 million in 1991 from $139.4 million in 1990.
Policy acquisition expenses of $148.3 million in
1989 included $3.6 million of additional amortiza-
tion due to the conversion of most auto policies
from 12-month to 6-month premiums and $8.2mil-
lion for the write-off of estimated unrecoverable
Medic~e Supplement acquisition costs.
Other operating expenses increased 20.0% to
$216.6 million from $180.5 million in 1990 due part-
ly to increased accruals for stock appreciation
rights (SARS), performance shares, and other in-
centive compensation plans related to potential
payouts in future years. SARS and performance
share expense varies with the price of the
Corporations Common Stock, while incentive
compensation is based upon the results of opera-
tions relative to stated goals. SARS and perfor-
mance share expenses were $19.5 million in 1991
reflecting the increase in the Corporations stock
price from $162 1/8 to $199 per share; this com-
pares to an expense of $7.7 million in 1990 when
the increase in the stock price was much less.
Incentive compensation expense related to the per-
formance of the Corporations common stock port-
folio was $7.5 million in 1991 compared to negative
$1.7 million in the prior year, reflecting the excel-
lent total return on common stocks in 1991. Other
operating expenses dso include the provision for
GEFCO loan and real estate losses of $1.7 million in
1991 compared to $3.3 million in 1990 and $7.5 mil-
lion in 1989.
A provision for the potential refund of premium
to California policyholders of $13.4 million in 1990
and $14.3 million in 1989 was charged to opera-
tions. No charge was made in 1991.
Dividends to policyholders of $27.4 million were
accrued in 1991 to be paid to policyholders in
states where voluntary auto underwriting experi-
ence was more favorable than anticipated.
Dividends of $6.3 million were accrued in 1990 and
$5.0 miIIion in 1989.
The consolidated underwriting ratio (after divi-
dends) was 96.4% in 1991 compared to 96.4% in
1990 and 97.4% in 1989. The accruals for dividends
to policyholders added 1.5, .4, and .4 points to the
underwriting ratio in 1991, 1990 and 1989, respec-
tively.
Interest expense on corporate debt increased to
$18.3 million in 1991 from $16.2 million a year ear-
lier and $17.5 million in 1989. This increase is due
I
Current tax expense on net income was $74.2 mil-
lion in 1991, $69.6 million in 1990 and $66,3 million
in 1989, reflecting these provisions.
The Corporation pays the greater of regular tax
or alternative minimum tax (AMT) to the Internal
Revenue Service. Through 1991 regular tax has ex-
ceeded AMT, but new provisions for computing
AMT became effective in 1990 which increase
AMT. Depending upon the Corporations level of
taxable income in the future, these AMT provisions
could increase the Corporations income tax ex-
pense to an amount in excess of re@ar tax.
NET INCOME
Netincome totaIed $196.4 million ($13.48 per
share) compared to $208.4 million ($13.64 per
share) in 1990 and $213.1 million ($13.74 per share)
in 1989. Per share earnings included special tax
benefits of $.18 in 1991, $1.71 in 1990 and $.35 in
1989 for the fresh start provisions for salvage
and subrogation and discounting reserves previ-
ously described. Net income in 1991 included net
aftertax realized gains of $19.4 million ($1.33 per
share) compared to 1990 and 1989 gains of $13.0
million ($.85 per share) and $73.8 million ($4.76 per
share), respectively.
The number of shares of Common Stock out-
standing was reduced each of the last three years
through the repurchase of shares, as explained in
the Capital Structure section of this report. The
weighted average shares outstanding were
14,570,948 in 1991 compared to 15,279,405 in 1990
and 15,504,374 in 1989.
Net unrealized appreciation of equity securities,
which is reflected directly in shareholders equity
but not in net income, increased $155.7 million in
1991 compared to a decrease of $60.5 million in
1990, reflecting significant increases in equity mar-
kets.
The Corporation purchased Southern Heritage
Insurance Company on April 11, 1991 and
Merastar Insurance Company on June 21, 1991.
The acquisitions were accounted for using the pur-
chase method of accounting and the results of their
operations are included in the consolidated results
beginning with their respective purchase dates.
A letter of intent regarding the sale of Garden
State, signed in the second quarter, expired by its
terms in September 1991. Negotiations were re-
sumed in February 1992.
CAPITAL STRUCTURE
On December 31, 1991 the Corporations common
shares outstanding totaled 14,209,492, reduced
through repurchases from the 15,439,584 shares
outstanding on December 31, 1988. The
Corporation acquired through open market and
private transactions a net 645,157 shares for $106.5
million in 1991, 330,333 shares for $46.6 million in
1990 and 272,012 shares for $37.2 million in 1989.
Under the current repurchase authorization,
853,548 shares remained unpurchased at December
31, 1991. Through February 18, 1992 the
Corporation had purchased 44,346 shares for $8.9
million.
Book value per share at December 31,1991 was
$83.34 based on 14,209,492 shares outstanding and
shareholders equity of $1,184.3 million, up from
$65.32 per share at the end of 1990. Book value in-
creased as a result of the large unrealized gains
and net income, partially offset by Treasury Stock
purchases and dividends to shareholders,
In September 1991 the Corporation issued $100
rniIlion of 9.15% Debentures due 2021. During 1991
the Corporation repaid $16.7 million of 13 1/2%
Debentures and also redeemed $53.5 million of
11% Debentures.
At December 31, 1991 the Corporation and
GEFCO had a credit agreement under which
GEFCO had borrowed a total of $75 million, In
February 1992 the credit agreement was replaced
with a new revolving credit facility under which
the Corporation and GEFCO can borrow up to
$150million and $100million, respectively, with
total borrowings not to exceed $150 million. The
amount which may be borrowed is reduced by $50
million every three months beginning November
1994 and the credit facility terminates in May 1995.
The GEICO Companies Employee Stock
Ownership Plan and Trust (the Trust) purchases
shares of the Corporations stock with borrowed
funds as authorized by the Board of Directors. The
repayment of such loans, including interest, is
guaranteed by the Corporation. In turn, the
Corporation makes voluntary contributions to the
Trust which are used to pay the interest and to re-
duce the principal. As principal and interest pay-
ments are made, a prorated number of shares is re-
leased to the accounts of all participating associ-
ates.
The Trust borrowed $6.5 million in 1991 and
$5.0 million in both 1990 and 1989. In the same pe-
riod, the Corporation accrued contributions of
$24.8 million, enabling the Trust to make interest
payments and repay $17.4 million of the loan prin-
cipal. On December 31, 1991 the loan balance was
$50 million, with principal payments due each year
to the year 2001. The obligations of the Trust are in-
cluded in the Corporations debt. An amount rep-
resenting the obligations of the Trust which have
not yet been charged to compensation expense is
deducted from shareholders equity.
PROPERTY AND CASUALTY LOSS
RESERVES
LOSS RESERVING METHODOLOGY
Reserves for loss and loss adjustment expenses
(LAE) at any report date reflect the estimate of the
liability for the dtimate net cost of reported claims
and estimated incurred but not reported (IBNR)
claims arising from accidents which had occurred
by that date. Property and casualty loss reserves on
unsettled claims are based on averages for all auto-
mobile physical damage, property damage liabili-
ty and medical payments claims, and for other au-
tomobile lability claims reported within the most
recent three months. Case-basis estimates are es-
tablished for automobile bodily injury liability,
uninsured motorist and personal injury protection
claims in the third month and for lines of business
other than automobile from inception. IBNR loss
reserves are calculated estimates. The reserves for
losses include additional amounts to reflect antici-
pated future economic and social conditions. The
determination of these amounts includes consider-
ation of studies of the Companies reserve levels
performed annually by independent consulting ac-
tuaries. The methods used to develop reserves are
subject to continuing review and refinement.
Property and casualty reserves include a provi-
sion for inflation in the expected cost of settling
claims. Reserves for claims while on average, as
well as IBNR claims, are based on selected average
claim costs which reflect the costs and inflation
trends observed in claims closed in recent quarters.
Case-basis reserves are established by claim per-
somel based upon the projected cost of settling
each claim in todays dollars plus an explicit pro-
December 31, 1989, which were assumed under a
statutory reinsurance contract,
LOSS RESERVE DEVELOPMENT
Loss and loss adjustment expense reserves are es-
tablished at each valuation date for all reported
and projected IBNR claims using managements
judgment based on the information known as of
that date. As time passes, more information about
the claims becomes known and reserve estimates
are appropriately adjusted upward or downward.
Because of the estimation, elements encompassed
in the reserving process, and the time it takes to
settle many of the most substantial claims, several
years are required before a meaningful comparison
of actual losses to the original estimate of reserves
can be developed.
The development of reserves is represented by
the difference between estimates of reserves as of
the original years end and the re-estimated liabili-
ty at each subsequent years end. This is based on
actual payments in full or partial settlement of
claims, plus re-estimates of the reserves required
for claims still open or claims still unreported
(IBNR). Downward development means that the
original reserve estimates were higher than subse-
quently indicated. Upward development means
that the original reserve estimates were lower than
RECONCILIATION OF CLAIM RESERVES
(In millions)
Reserves for loss and LAE at January 1 .........................
subsequently indicated,
The table on the next page presents the GAAP
claim reserve liability for loss and LAE as original-
ly estimated for the years 1981 through 1991, the
cumulative amounts paid with respect to the re-
serves for each subsequent year, the re-estimated
liability at the end of each year, and the resulting
development of the original reserve estimates for
1981 through 1990 as evahrated through December
31,1991.
The Corporation strives to establish adequate re-
serves at the original valuation date; however, as
the table shows, reserves may subsequently devel-
op substantially upward or downward. The up-
ward development of reserves for 1983 through
1987 is substantially due to increased estimates of
incurred losses for Resolute and commercial um-
brella liability insurance for prior years. These re-
serves at December 31, 1983, 1984, 1985, 1986, and
1987 have developed upward approximately $60
million, $92 million, $100 million, $96million and
$71million, respectively.
Management believes that its aggregate reserve
for loss and loss adjustment expenses at December
31,1991 is reasonable and adequate, but given the
inherent variability of conditions which affect fu-
ture claim settlements, the subsequent develop-
ment of such reserves could be substantial.
PIUSreserves of purchased subsidiaries
at their purchase dates .......................................................................
Incurred loss and LAE
Provision for current accident year claims .....................................
Increase (decrease) in provision for
prior accident yems claims .................................................+.........
Total loss and LAE incurred .............................................................
Payments for loss and LAE
Payments on current accident year claim .....................................
Payments on prior accident years claims, .......................................
Total payments for loss and LAE .....................................................
Reserves for loss and LAE at December 31 ..........................................
1991 1990 1989
$ 1,306.5 $1,214.9 $1,117.4
27.6 --- ---
1,334.1
1,490.8
(40.6)
1,450.2
(783.2)
(550.7)
(1,333,9)
$ 1.450.4
1,214.9 1,117.4
1,361.7 1,312.5
(33.2) (47.3)
1,328.5 1,265.2
(718.4) (695.7)
(518.5) (472.0)
(1,236.9) (1,167.7)
$1,306.5 $ 1,214.9
CONSOLIDATED PROPERTY AND CASUALTY RESERVE DEVELOPMENT
(In millions)
As of December 31,
Reserves for Loss and LAB ....................
Cumtiative Payments as of:
One year later ......................................
Two years later ....................................
Thee years later ..................................
Four years later ...................................
Five years later ....................................
Six years later ......................................
Seven years later .................................
Eight years later ..................................
Nine years later ...................................
Tenye~s later .....................................
Reserves Re-estimated as ofi
End of year ...........................................
One year later ......................................
Two years later ....................................
Three years later .................... ..............
Four years later ...................................
Five years later ....................................
Six years later ......................................
Seven years later .................................
Eight years later ..................................
Nine years later ...................................
Tenyems later .....................................
Upward (Downward)
Development ......................................
1981
$477.8
207.6
295.8
343.8
368.5
381.8
388.8
394.6
398.0
400.7
402.5
477.8
447.4
422.8
413.9
406.3
407.4
410.0
412.0
411.6
417.5
419.9
$~9)
1982
$518.1
229.2
320.9
371.2
400.3
415.9
426.7
431.9
439.1
442.8
518.1
470.6
451.1
445.5
445.5
454.5
458.7
457.5
468.9
474.1
$ (44.0)
1983 1984 1985

$526.3 $580.2 $698.6
1986 1987 1988 1989 1990
/
.
$831.5 $993.4 $1,117.4 $1,214.9 $1,306.5$1,,
236.7 274.3 329.7 376.8 453.7
338.7 393.3 478.5 563.2 660.3
396.8 461.7 569.7 666.9 774.8
429.2 503.8 619.0 727.7 836.6
449.1 524.8 654.7 761.0
458.7 549.0 673.6
474.2 560.6
480.7
526.3
481.6
480.3
479.7
493.3
505.7
505.8
535.8
540.3
580.2 698.6 831.5 993.4
563.6 694.2 834.51,009.1
562.5 707.8 862.2 990.5
580.7 729,7 854.01,003.4
597.4 730.1 878.51,008.5
598.6 765.5 886.1
635.5 775.7
645.4
$ 14.0 $ 65.2 $ 77.1
--
Upward development of reserves for 1983 through 1987 is substantially due to increased es{
reinsurance operations and commercial umbrella liability claims described herein.
LIQUIDITY
CASH FLOW
Cash flow from operations of the Corporation and
its subsidiaries was $366.5 million in 1991 com-
pared to $261.2 million in 1990 and $262.8 million
in 1989.
During the most recent three-year period, the
Corporations financing activities used $197.2 rnil-
Iion net to repurchase its Cornrnon Stock and $90.2
million to pay dividends to its shareholders.
Financing activities in 1991 included the issuance
in September of $100 million of 9.15% Debentures
due 2021. During 1991 the Corporation repaid
$16.7 million of 13 1/2% outstanding debt and also
redeemed $53.5 million of 11% Debentures due
1999.
472.0 518.5 550.7
692.5 764.2
819.2
1,117.4 1,214.9 1,306.5
1,070.1 1,181.7 1,265.9
1,068.6 1,171.9
1,068.9
+
$54.6 $ 15.1 $ (48.5)$ (43.0)$ (40.6) -
.
timates of Iiabilitv losses incurred from Resolutes
During the same three-year period, thl
Corporation used a net 5568.1 million in investin~
activities. Investing activities in 1991 included p~
chasing Southern Heritage Insurance Company fo
approximately $17.5 million and Merasta
Insurance Company for approximately $27.8 mil
lion. Cash flow in 1990 included $48.4 million i
proceeds from the sale of BIG.
The Corporation pl- to pursue the develoF
ment of its GEICO Plaza headquwters proper~, a
though activity regarding the expansion has bee
deferred pending resolution of several issues ir
eluding county construction of a new stree
Additionally, the Corporation plans to construct
new regional office building of approximate
350,000 square feet in Stafford County, Virginia.
The Corporation receives dividends fror
Government Employees Insurance Company, its
principal subsidimy, which provides a portion of
the funds necessary for parent company opera-
tions. The regulatory restrictions on such divi-
dends are described in Note C to the financial
statements.
The Corporation has a continuing ouflook for a
positive cash flow and ample liquidity from opera-
tions.
INVESTMENTS
Pretax net investment income increased 8.0% to
$191.2 million in 1991 from $177.1 million in 1990
and $152.4 million in 1989. Investment income
growth over the past three years was moderated
due to substantial repurchases of the Corporations
Common Stock using funds which would other-
wise have been available for investment.
Net new investments of $169.2 million were
made in the consolidated portfolio in 1991. Net
purchases made included $346.8 million of U.S.
Government/Agency bonds and $20.3 million of
corporate bonds. Net sales included $90.5 million
of short-term investments and $87.0 million of
common stocks and Americus Trust Primes.
During the year the Corporation realized net after-
tax gains of $19.4 million from the sale of invest-
ments.
The common stock portfolio, adjusted for pur-
chases and sales, had a total aftertax gain (includ-
ing unrealized gains and losses) of 36.5% in 1991
compared to an aftertax loss of 4.9% in 1990. The
comparable returns for the S&P 500 were a gain of
20.3% in 1991 and a loss of 1.0% in 1990. The
largest industry positions in the common stock
portfolio at year-end were in finance (26.6%), ser-
vices (20.9%), electronics (20.7%) and tobacco
(14.6%), Net unrealized appreciation of equity se-
curities, after deferred taxes, and as reflected in
shareholders equity, was $183.1 million compared
to $27.4 million a year earlier.
The GEICO Corporation Investment Summary
shows the year-end consolidated investment port-
folio for 1991,1990 and 1989. The carrying value of
bonds and redeemable preferred stocks is amor-
tized cost, while equity securities are carried at
year-end market value. Fixed maturity invest-
ments are carried at amortized cost, since such se-
curities are generally held to maturity. The
Corporations policy is to invest in bonds with a
rating of A (upper medium quality) or above. The
estimated weighted average rating of the bond
portfolio at December 31, 1991 was between Aa
(high quality) and Aaa (best quality). The invest-
ment portfolio does not include any below-invest-
ment-grade bo,nds of a material amount. The mar-
ket value of fixed maturity investments was
$2,421.7 million and $1,941.5 million at December
31,1991 and 1990, which was $146.7 million and
$56.6 million above statement carrying value, re-
spectively.
At December 31,1991 the Corporation and its
subsidiaries held $134.6 million in cash and short-
term investments. In addition, approximately
$162.2 million of the bond portfolio will mature in
1992.
FINANCIAL ACCOUNTING
STANDARDS BOARD STATEMENTS
The Financial Accounting Standards Board has is-
sued several statements which affect accounting
practices used by the Corporation. See page 41 for
a discussion of these statements, their implementa-
tion, and their effect on the Corporations financial
statemenk,
1989
-
Carryin
value
$ 242.
1,279 .-
63.
1,585.
41.
13.
1,640.
-i
I
78.
770.
171.5
$2,582.7
-
1
GEICO CORPORATION INVESTMENT SUMMARY
(In millions)
1991
Carrying
Value % Portfolio
1990
Carrying
Value
Fixed maturities
US. Treasury Securities and obligations of
U.S. government corporations and agencies ................................
Obligation of states and political subdivisions ............................
Corporate bonds and notes ...............................................................
$ 763.9
1,254.5
206.5
2,224.9
50.1
.-
2,275.0
23.9%
39.3
6.5
-
69.7
1.6
--
~
$ 408.0
1,290.0
154.1
1,852.1
32.9
---
Bonds ..............................................................................................
Redeemable preferred stocks ...........................................................
Other fixed maturities .......................................................................
1,885.0
Equity securities
Common stocks ..................................................................................
Nonredeemable preferred stocks .....................................................
23.5
1.8
~
3.4
100.0%
603.2
54.1
657.3
151.7
750.4
56.7
807.1
110.0
Short.term investments ........................................................................
Totals .............................................................. .........................................
$2,694.0 $3,192.1
GEICO CORPORATION BOND MATURITY TABLE
(In millions)
I
1990
Amortized Market
Value % Portfolio Value
1991
Amortized
Value
Market
Value % Portfolio
Maturity
$ 116./
$ 162.2
801.1
488.2
89.3
12.2
50.0
621.9
7.3%
36.0
21.9
4.0
.6
2.2
~
$ 165.1
851.3
526.8
101.4
13.5
54.0
651.9
$ 115.7
691.5
567.0
129.6
62.5
47.2
238.6
$ 1,852.1
6.2%
37.3
30.6
7.0
3.4
2,6
12.9
Less than one year ............................................................
1-5 years .................................. ...........................................
6-10 years ...........................................................................
11-15 years .........................................................................
16-20 years .........................................................................
Greater than 20 years .......................................................
Asset-backed securities (1) ..............................................
708.3
583.9
140.3
65.01
48.1
242.4
$2,364.0 100.0% $1,904,0
$ 2,224.9 100.0%
(1) Asset-backed securities consist of mortgage-backed obligations of U.S. government corporations and agencies and corporate mo,rtgage and
equipment-backed obligations. Principal repayments are received over the life of these securities. At December 31,1991 these securities had an
average reported maturity, taking into account estimates for early repayments, of eight to ten years.
REPORT OF COOPERS &LYBRAND, INDEPENDENT ACCOUNTANTS
To The Shareholders
GEICO Corporation
We have audited the accompanying consolidated balance sheets of GEICO Corporation and subsidiaries
as of December 31, 1991 and 1990, and the related consolidated statements of income, shareholders
equi~, and cash flows for the years then ended. These financial statements are the responsibility of the
Corporations management, Our responsibility is to express an opinion on these financial statements
based on our audits, The consolidated financial statements of GEICO Corporation and subsidiaries for
the year ended December 31,1989 were audited by other auditors, whose report, dated February 16,1990,
expressed an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit dso includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the 1991 and 1990 financial statements referred to above present fairly, in all material
respects, the consolidated financial position of GEICO Corporation and subsidiaries as of December 31,
1991 and 1990, and the consolidated results of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles.
Washington, D.C.
February 18,1992, except as to
information presented in Note Q,
for which the date is February 26,1992
GEICO CORPORATION
CONSOLIDATED BALANCE SHEET
December 31, in thousands of dollars
ASSETS
Investments - Note D:
Fixed maturities, at amortized cost
U.S. Treasury securities and obligations of U.S. government corporations and
agencies (market $807,719 and $415,209) ...................................................................................................
Obligations of states and political subdivisions (market $1,339,578
and $1,331,866) ........................................................................................................................................4......
Corporate bonds and notes (market $216,740 and $156,950) .....................................................................
Redeemable preferred stocks (market $57,695 and $37,510) ......................................................................
1991
$ 763,967
1,254,521
206,470
2,224,958
50,091
2,275,049 1,884,951
Equity securities, at market
Common stocks (cost $487,411 and $570,324) ..............................................................................................
Nonredeemable preferred stocks (cost $55,164 and $58,129) .....................................................................
750,399
56,710
603,205
54,118
807,109 657,323
Short-term investments ........................................................................................................................................ 109,957 151,742
Cash ............................................................................................................................................ .............. ..............
Loans receivable, net - Note E ..................................................................... .......................................................
Investment in affiliates - Note A.........................................................................................................................
Accrued investment income ................................................................................................................................
Premiums receivable ............................................................................................................................................
Amounts receivable from sales of securities .....................................................................................................
Deferred policy acquisition costs - Note F ........................................................................................................
Federal income taxes - Note J. .......................................................................................................................,,...,
Property and equipment, at cost less accumulated depreciation of $78,937
and $76,627- Note H .........................................................................................................................................
Other assets .......................................................... .... ............... ........................................................................ .......
3,192,115
24,659
123,606
38,315
49,892
357,905
16,W6
106,572

101,321
75,408
2,694,016
35,736
145/203
34,449
45,168
317,145
10,792
89,697
53,057
88,818
61,859
$4,085,839 $3,575,940
See Notes to Consolidated Financial Statements
1991 1990
Notes H and M .................................................................................................................... ...............................
Total Shareholders Equi~ ................................................................................................................................
Total Liabilities and Shareholders Equi~ ...................................................................................................
$1,213,963
2361394
747,447
27,729
27,700
45,213
40,081
2,338,527
201,081
98,000
23,149
2,359
238,462
2,901,578
32,178
192,780
183,137
1,657,668
(831,814)
(49,688)
$1,090,240
216,280
651,719
6,995
27,700
39,480
34,927
2,067,341
173,449
107,350
39,808
18,228
..-
199,756
2,605,932
32,174
192,474
27,416
1,493,163
(725,295)
(49,924)
1,184,261 970,008
$4,085,839 $3,575,940
GEICO CORPORATION
CONSOLIDATED STATEMENT OF INCOME
For the year ended December 31, in thousands of dollars excepf per share resulfs
Revenue
Premiums ........................................................................................................................................................
Net investment income -Note D .................................................................................................................
Realized gains on investments .Note D .....................................................................................................
Interest onlomreceivable ...........................................................................................................................
Equity in earnings of unconsolidated affiliates .........................................................................................
Otierrevenue .................................................................................................................................................
Benefits and Expenses
Losses and loss adjustment expemes ..........................................................................................................
Life benefits and interest on policyholders fwds ....................................................................................
Policy acquisition expemes .Note F ......................................................................................i....................
Other operating expenses .............................................................................................................................
Potential pretium refunds .Note G...........................................................................................................
Dividends to poEcyholders ...........................................................................................................................
Interest expense - Note H:
Corporate and other ....................................................................................................................................
Finance compmy .........................................................................................................................................
Total Benefits and Expemes ....................................................................................................................
Net Income Before Income T=es .................................................................................................................
Federal income tax expense - Note J ............................................................................................................
1991
$1,888,368
191,226
29,331
20,019
4,139
13,944
2,147,027
1,450,145
19,689
162,115
216,615
27,372
18,267
11,830
1,906,033
240,994
44,614
$ 196,380
1990
$1,692,518
177,087
19,587
23,606
3,303
18,776
1,934,877
1,328,493
13,085
139,402
180,451
13,440
6,275
16,191
14,732
1,712,069
222,808
14,367
$ 208,441
!
$1,621,361 ~
152,422
109,133
\
29,215
10,462
16,796 I
1,9392
1,265,201,
27,1
148,328
190,332 \
14,2601
5,000 ~
17,521 i
16,124
1,683,960
255,429
42,376
$ 213,053
Net Income Per Share - Note L ................................................................................................................... $13.48 $13.64 $13.74
See Notes fo Consolidated Financial Sfafemenfs
:1C(3 CORPORATION
INSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
theyear ended December 31, in fhousands of dollars
nrnon Stock.
alance, beginning of year ........................................................................................................................
xercise of stock options ............................................................................................................4..............
alance, end of year .....................................................4.............................................................................
I
d-insurplus:
alance, beginning of year ..................... ......... .......... ........... ................. ............. ........................................
roceeds over par value of stock issued upon exercise of stock optiom ............................................
arket value over (under) cost of Treasury Stock reissued .................................................................
~alance,endofyear . ,. .................................. ...... .........................................................................................
1991 1990 1989
$ 32,174
4
$ 32,170
4
32,178 32,174
1921474
133
173
192,780
192,491
125
(142)
192,474
$ 32,161
9
32,170
192,017
418
56
192,491
r
ealized appreciation of equity securities:
alance, beginning of ye~ .........................................................................................................................
~ncrease (decrease) in unrealized appreciation, net of deferred taxes - Note D.................................
Bahmce, end of year .!..................................................................................................................................
27,416
155,721
183,137
87,912
(60,496)
27,416
46,530
41,382
87,912
etained earnings:
Balance, beginning of year. ........................................................................................................................
ket income .............................................................. .....................................................................................
Dividends ($2.28, $2.00 and $1.80 per shine) ...........................................................................................
Tax benefit of dividends to Employee Stock Ownership Trust ............................................................
Balance, end of ye= ....................................................................................................................................
1,493,163
196,380
(32,582)
707
1,657,668
reasury Stock, at cost
Balance, beginning of year .........................................................................................................................
Purchase of 700,070; 343,864 and 294,101 shares of Comon Stock ....................................................
Reissuance of 54,913; 13,531 and 22,089 shares of Comon Stock ......................................................
Balance, end of year ............................. ......... ... ...........................................................................................
(725,295)
(116,256)
9,737
(831,814)
umanteed bank loans of Employee Stock Ownership Trust
Balance, beginning of ye~ .........................................................................................................................
Borrowings ...................................................................................................................................................
Repa~enti ..................................................................................... .. ............ ...............................................
Additional accrued compemation ............................................................................................................
Balance, end of year ....................................................................................................................................
Dtd Shareholders Equity ..........................................................................................................................
(49,924)
(6,492)
6,492
236
1,314,224
208,441
(30,114)
612
1,493,163
(678,662)
(48,696)
2,063
(725,295)
(50,000)
(5,000)
5,000
76
1,128/170
213,053
(27,544)
545
1,314,224
(641,488)
(39,931)
2,757
(678,662)
(50,000)
(5,000)
5,000
---
(49,688) (49,924) (50,000)
$1,184,261 $970,008 $898,135
e Notes to Consolidated Financial Stafenrents
GEICO CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended December 31, in thousands of dollars
Operating Activities:
Net income ..................................................................................................................................................
Adjustments to reconcile net income to net cash provided by operating activities:
Net premiums receivable ........................................................................................................................
Deferred policy acquisition costs ...........................................................................................................
Loss, life benefit and loss adjustment expense reserves .....................................................................
Unearned premium ................................................................................................................................
Dividends to policyholders .....................................................................................................................
Federal income trees ................................................................................................................................
ReaLized gains ...........................................................................................................................................
Equity in undistributed earnings of tifiliates .......................................................................................
Provision for depreciation .......................................................................................................................
Accrual of discount and amortization of premiums on investments ...............................................
Potential pretium refunds .....................................................................................................................
Reinsurance balances and other ............................. ................................................................................
Netcfih protided byoperating activities"........................................................................................
Investing Activities:
Purchases of equity securities and fixed maturities ............................................................................
Change in payable on security purchmes .............................................................................................
Sales of fixed maturities ...........................................................................................................................
Maturities of fixed maturities .................................................................................................................
Sales of equity securities ......................................................................!...............................................!...
Net change in short-term investments ..................................................................................................
Change in receivable from security sales ..............................................................................................
Change in principal on loans receivable ...............................................................................................
Investment in affiliates and subsidimies ...............................................................................................
Proceeds from sales of affiliates and subsidimies ................................................................................
Purchase of property and equipment, net ............................................................................................
Other ............................................................................................................................................. ..............
Net cash used by investing activities .................................................................................................
Financing Activities:
Issuance of debt .........................................................................................................................................
Repayment and repurchase of debt .......................................................................................................
Net change in short-term borrowings ...................................................................................................
Decrease in savings deposits ...................................................................................................................
Proceeds from exercise of stock optiom ................................................................................................
Purchase of Cornrnon Stock (Treasury) .................................................................................................
Dividends paid to shareholders .............................................................................................................
Other ..................................... ......................... ........... ........................... ...................................................... .
Net cash used by financing activities ................................................................................................
Change in cash ....................................................................!. ....................................................................
Cash at beginning of yem ......................... ................... ............................................................................
1991
$196,380
(32,972)
(14,252)
121,944
82,128
20,734
(22,313)
(29,331)
(2,687)
11,093
(5,334)
.-
41,140
366,530
(930,996)
(18,228)
104,154
251,345
315,838
90,502
(5,254)
19,726
(46,720)
210
(22,285)
657
(241,051)
141,701
(130,822)
7,400
(16,659)
137
(108,609)
(32,582)
2,878
(136,556)
(11,077)
35,736
$ 24,659
1990
$ 208/441
(7,819)
(7,119)
89,225
45,868
1,995
(66,234)
(19,587)
(2,214)
11,104
(4,816)
13,440
(1,127)
261,157
(783,526)
15,107
114,366
122,387
327,912
20,021
597
28,284
(350)
48,538
(22,242)
(1,019)
(129,925)
(;;,328)
3,710
(10,984)
129
(58,077)
(30,114)
2,477
(l18,18n
13,045
22,691
$ 3k,736
See Notes to Consolidated Financial Statements
kEICO CORPORATION
JOTES To CONSOLIDATED FINANCIAL STATEMENTS
OTE A: CONSOLIDATION
~econsolidated financial statements include the accounts of GEICO
]rporation (the Corporation) and its subsidimies, The investment in
VEMCO Corporation, a 34% owned general aviation insurance
mpany, is accounted for using the equity method.
Significant intercompany accounts and transactions have been
minated.
tOPERTY AND CASUALTY INSURANCE
!rnmar}~financial data for the Corporations property and casualty
bsidi~ies are as follows. The property and casualty insurance
bsidiuies included are Government Employees Insurance Company
EICO), GEICO General Insurance Company, GEICO Indemnity
)mpany, Criterion Casualty Company, Southern Heritage Insurance
)mpany, and Merastar Insurance Company. Southern Heritage
surance Company was purchased in April 1991 for $17.5 million and
N accounted for using the purchase method of accounting, restiting
$11.0 million of goodwill. Merastar Insurance Company was
[rchased in June 1991 for $27.8 million and was accounted for using
s purchase method of accounting, resulting in $3.6 million of
odwill. The results of their operations are included in the property
d casualty restits beginning with their respective purchase dates.
Condensed Balance Sheets
(In thousands)
Assets
Investments
Fixedmaturities.......................................................
Equity securities .....................................................
Short-terminvestments..........................................
Mffliates....................................................................
Cash ..............................................................................
Propertyand equipment,net.......................................
Premiumsreceivable,net ...........................................
Deferredpolicyacquisitioncosts ...............................
Federal incometaxes ...................................................
Other assets ...................................................................
Liabilities and Shareholde~ Equity
Reservesfor losses andloss
adjustmentexpenses..................................................
Unemnedpremiums.....................................................
Federatincometwes .....................................................
Other liabdities...............................................................
Shareholdersequity ....................................................
December31,
1991 1990
$2,108,651 $1,718,414
799,983 643,557
78,142 131,218
73,232 66,143
17,926 20,261
91,294 78,740
357,145 315,095
71,320 56,955

45,905
97,067 72,114
$3,694,760 $3,148,402
$1,405,274 $1,263,025
747,157 650,523
18,350 --
235,349 220,635
1,288,6301,014,219
$3,694,760 $3,148,402
Condensed Income Statements Year EndedDecembr 31,
(In thousands) 1991 1990 1989

Premiums................................................... $1,864,709 $1,676,328 $1,579,017
Net investmentincome............................ 167,347 150,596 127,704
Realizedgainson investments................ 30,987 22,434 103,359
Equity in incomeof affiliates.................. 3,721 4/041 3,549
Other revenue............................................ 2,160 1,971 1,525
Total Revenue..................................... 2,068,924 1,855,370 1,815,154
Lossesand loss
adjustmentexpenses............................ 1,440,2511,321,9031,261,905
Other expenses.......................................... 344,822 294,787 279,312
Interest expense......................................... 4,962 6,207 4,216
Federal incometax expense..................... 56,863 16/997 51,356
Total Benefitsand Expenses............. 1,846,898 1,639,894 1,596,789
Net kcome .............................................. $ 222,026 $ 215,476 $ 218,365
RESOLUTE GROUP, INC.
Resolute Group, Inc., a reinsurance subsidiary, stopped accepting
new business in late 1987 and is reducing its inforce business.
Summary financial data are as follows:
(In millions)
hvestients ...................................................
Total =se& ....................................................
Loss andloss adjustment
expensereserves.......................................
Shareholdersequity....................................
Premiumsearned.........................................
Underwritingloss........................................
Net investmentincome...............................
Net income(loss) .........................................
LIFE INSURANCE
1991
$54.7
60.9
45.1
15.o
(10;
3.7
(4.4)
1990
$49.6
65.8
43.5
18.7
(7:)
(H)
1989
$54.7
68.8
51.6
13.6
(fi)
4.5
.6
Summary financial data for the Corporations life insurance
subsidiaries me presented below.
(In millions)
~ m >
hvestienk ................................................... $120.1 $101.6 $106.6
Total msek .................................................... 162.6 142.1 148.2
Shareholdersequity.................................... 61.3 51.8 49.3
Pretiw ...................................................... 23.0 15.4 41.2
Net investmentincome...............................
10.0 9.9 9.8
Net income (loss).........................................
4.1 3.4 (2.1)
AVEMCO CORPORATION
Summary financial data for AVEMCO Corporation, a 34% owned
general aviation insurance company, are as follows:
(In millions)
1991 ~ 1989
Total resets.................................................... $194.1 $184.5 $191.2
Shareholdersequity....................................
84.1 68.7 75.9
Revenue......................................................... .- 84.5
79.3 93.3
Net kcome .................................................... 15.4 12.5 13.6
In November 1989, the Corporation sold 427,807 shares of AVEMCO
common stock to AVEMCO for $10 million resdting in a pre-tax gain
of $3.2 million. Dividends of $1.5 million in 1991, $1.1 million in 1990
and $1.2 million in 1989 were received from AVEMCO. At December
31, 1991, the total market value of AVEMCO shares held by the
Corporation was $97.3 million.
GEFCO
Summary financial data for GEFCO, a consumer finance subsidia
are as follows:
(In millions) December31,
CondensedBalance Sheets
1991 199
.
Gsh and hvestients .......................................................
$12.1 $19
Loansreceivable,net.........................................................
123.6 145
Other assets ......................................................................o.
~ 18
G Tot~ ~sets ................................................................... _ _ $154.6
Debt ..................................................................................... $98.0 $107
Savings deposits................................................................
23.1 39
Other liabilities................................................................... _ _ 15.7 15
Total liabilities.............................................................
136.8 162
Shareholdersequity......................................................... _ _
17.8 20
Total liabilitiesand equity......................................... $154.6 $183
=
CondensedIncome Statements
Interest on loans receivable........................
Investmentand other income....................
Total revenue.........................................
Interest expeme............................................
Other operatingexpenses...........................
Income ties .................................................
Extinguishmentof debt, net of tax ............
Net income (loss)...................................
Year EndedDecember31,
1991 1990 191
.
$20.0
2.0
22.0
12.2
8.6
(1:)
$ (.7)
$23.6
2.2
25.8
15.1
9.8
.3
(.3)
$ .3
$29
2
31
17
16
(
(
$ (1
=
BOND INVESTORS GROUP, INC.
GEICOS investment in Bond Investors Group, Inc. (BIG), formerl
20% owned municipal bond guarantee insurance company, v
accounted for using the equity method until sold to MBIA Inc.
January 1990. Equity in BIGs net income approximated $.1 millior
1990 and $6.5 million in 1989. GEICO received dividends of $
million in 1989 from BIG. GEICO realized an aftertm gain of !i
million on the sale of BIG in 1990.
PROPERTY AND EQUIPMENT
The annual provisions for depreciation are computed by the straight-
line method over 31 to 45 year useful lives for buildings and over 3 to
10 year useful lives for equipment.
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES
Property and casualty loss reserves are based on averages for
automobile claims reported within the most recent three months, case
basis estimates for other reported claims and calculated estimates of
unreported losses. The reserve for losses further includes additional
amounts to reflect anticipated future economic and social conditions.
The determination of these additional amounts includes consideration
of studies of reserve levels performed by independent consulting
actuaries. The reserve for losses has been reduced by approximately
$66.9 million and $65.0 million at December 31, 1991 and 1990,
respectively, for anticipated salvage and subrogation recoveries. Loss
adjustment expense reserves are based upon estimates of expenses to
be incurred in the settlement of claims. Reserves are recorded net of
estimated reinsurance recoverable on unpaid losses and loss
adjustment expenses.
Management believes that its aggregate reserves for loss and loss
adjustment expenses at December 31, 1991 are reasonable and
adequate to cover the ultimate net cost of losses on reported and
unreported clfi arising from accidents which had occurred by that
date, but such reserves are necessarily based on estimates and the
ultimate net cost may vary from such estimates. As adjustments to
these estimates become necessary, such adjustments are reflected in
current operations. The methods used to develop these reserves are
subject to continuing review and refinement.
LIFE BENEFIT RESERVES AND POLICYHOLDERS
FUNDS ON DEPOSIT
Liabilities for future life policy benefits have been computed
principally by the net level premium method with anticipated rates of
mortality, withdrawals and investment yield based upon company
experience. Annuity contracts without mortality risks are accounted
for as investment contracts. Amounts received for investment
contracts and universal life-type contracts are recorded as
policyholders funds on deposit.
PREMIUM REVENUE
Property and casualty and health premiums are earned prorata over
the terms of the policies, and life and annuity premiums are
recognized as revenue over the premium paying period. Premium
revenue is reported net of reinsurance.
INCOME TAXES
In early 1992, Statement of Financial Accounting Standards No. 109
Accounting for Income Taxes was issued. The Statement requires
an adjustment of deferred taxes to the liabili~ method and also
establishes guidelines for recognizing deferred tax assets, The
required and planned implementation of the Statement is 1993, There
are several implementation issues which require further consideration
by the Corporation prior to quantifying the impact of the new
standard at this time.
NOTEC: STATUTORY RESULTS
Results as determined under statutory practices areas follows:
(In millions) 1991 1990 1989
Consolidatedpropertyand casualty
insuranceandreinsurance
Net income............................................. $179.0 $173.5 $223.7
Policyholderssurplus.......................... 1,104.6 811.6 814.8
Consolidatedlife insurance:
Net income(loss)................................... 1.1 3.1 (.1)
Policyholderssurplus.......................... 30.1 21.4 17.8
Statutory requirements place limitations on the maximum amount of
annual dividends and other distributions which can be remitted to the
Corporation by its consolidated insurance subsidimies without prior
approval of the appropriate state insurance commissioners. The
consolidated insurance companies had total shareholders equity of
$1,288.6 million at December 31,1991, of which approximately $539.5
million is available for payment of dividends in 1992 and other
amounts may be available in the form of 10- or cash advances. The
Corporation received dividends of $147.1 million, $72.1 million and
$107.1 million from these subsidiaries in 1991, 1990, and 1989,
respectively.
NOTE D: INVESTMENT OPERATIONS
INVESTMENT INCOME
The sources of investment income are summarized as follow
(In thousands) ~~
Fixedmaturities....................................... $161,890 $138,006
Equitysecurities ..................................... 23,816 28,424
Short-terminvestments.......................... 12,405 16,629
Other ......................................................... 1302 1,340
Total investmentticome ........................ 199,613 184,399
Investmentexpenses............................... =7 7312
-
Net investmentincome .......................... $191,226 $177,087

The Corporations investments in Federal Home Loan
Corporation common stock with a market value of $199.4 n
Honeywell, Inc. cornrnon stock with a market value of $14
exceeded 10% of the Corporations shareholders equity at
31,1991.
There were no investments in fixed maturities which
income producing for the year ended December 31,1991.
REALIZED GAINS (LOSSES)
Realized gains (losses) from sales of investments are sums
follows:
(In thousands) 1991 1990
F~ed maturities ...................................... $25,123 $ (4,964)
Equitysecurities ..................................... 4,124 12,242
Investmentsin affiliatesand other ...... 84 12309
$29331 - Realizedgains.......................................... , , $19587
.
Realized gains and losses from sales of fixed maturities
gross realized gains of $26.1 million, $2.3 million and $5.0 r
gross realized losses of $1.0 million, $7.2 million and $.4
1991,1990 and 1989, respectively.
JREALIZED AFFRECIATION (DEPRECIATION)
SUrnmary of the net change in unrealized appreciation
;preciation) on investments in equity securities during each year,
Iected directly in shareholders equity, is as follows:
thousands) 1991 1990 1989
rease (decrease)in unrealized
]preciation .......................................... $235,664 $ (90,914) $ 60,213
~ityin affiliatesumealized
)preciation(depreciation).................. 281 (747) 2,487
ferredfederal incometaxes ..............
~
31,165 (21,318)
rease (decrease)in unrealized
~Preclatio~net of deferredties .,.,. $155,721 $ (60,496) $ 41382
-
restments in fixed maturities are carried at amortized cost since
:h securities are generally held to maturity. A summary of
realized appreciation (depreciation) on investments in fixed
durities is as follows:
thousands) 1991 1990 1989
rket value ........................................... $2,421,732 $1,941,535 $1,693,351
~ortizedcost ........................................ 2,275,049 1,884,951 1,640,517
realizedappreciation
December31 ..................................... $ 146,683 $ 56,584$ 52,834
realizedappreciation(depreciation)
Iringthe year ...................................... $ 90,099 $ 3,750 $ 39,444
GROSS UNREALIZED GAINS (LOSSES)
Gross unrealized gains (losses) on investments in fixed maturities are
summarized as follows:
December31,
(1Hfhousarrds)
~~
Gross unrealizedgains:
U.S. Treasurysecwities and obligations
of U.S. governmentcorporationsand agencies..........
$ 43,919 $ 8,408
Obligationsof states and politicalsubdivision ........... 85,339 46,151
Corporatehnds and notes............................................. 10,372 3,628
Redeemablepreferredstocks ......................................... 7,820 4996
~
147,450 63,183
Gross unrealizedlosses:
U.S. Treasurysecurities and obligations
of U.S. governmentcorporation and agencies,......... 167 1,222
Obligationsof statesand politicalsubdivisions........... 282 4,281
Corporatebonds andnotes............................................. 102 741
Redeemablepreferredstocks.......................................... 216 355
767 6,599
$146,683 $ 56584
-
The consolidated unrealized appreciation on investments in equity
securities at December 31, 1991, before deferred tax effects, consisted
of gross gains of $275.9 million and gross losses of $11.4 million,
INVESTMENTS IN FIXED MATURITIES
The amortized cost and market value of investments in fixed
maturities at December 31, 1991 are shown below by their maturity
dates.
Amortized Market
(In fhousands) cost Value
1992 ..................................................................................... $ 164,053 $ 167,390
1993- 1996 ........... ............................................................... 821,894 874,344
1997-2001 .......................................................................... 504/376 545,504
2002andafter ................................................................... 162,829 18Z562
Asset-backedsecurities.................................................... 621,897 651,932
$2,275,049 $2,421,732
Asset-backed securities consist of mortgage-backed obligations of
U.S. government corporations and corporate mortgage and
equipment-backed obligations. Principal repayments are received
over the life of these securities. At December 31, 1991 these securities
had an average reported maturity, taking into account estimates for
early repayments, of eight to ten years.
NOTE E: LOANS RECEIVABLE
LOANS RECEIVABLE
Loans receivable are comprised primarily of GEFCOS collateral loans,
with maximum terms of 180 months, net of the aIlowance for loan
losses. These loans are primarily collateralized by residential real
estate and timeshare intervals in resort condominiums.
At December 31, 1991 and 1990, the accrual of interest income was
suspended on $4.0 million and @.4 million of loans, respectively.
The approximate contractual maturities of the installments of the
loans receivable at December 31,1991 were as follows:
(In thousands)
1992 ...................................... $ 35,338
1993 ...................................... 21,115
1994 ............................ .......... 19,426
1995 ...................................... 13,216
1996 ..................................... 12581
1997 and after .................... 24,923
$126,599
Some loans may be renewed or paid in full prior to contractual
maturity dates. Accordingly, the table above is not a forecast of
future cash collections. During the years ended December 31, 1991
and 1990, principal cash collections on loans receivable were
approximately $41.2 million and $60.1 million, respectively.
In the normal course of its lending operations, GEFCO makes loan
commitments and issues standby letters of credit to its customers. At
December 31, 1991, outstanding commitments and letters of credit
totaled $12.2 million,
ALLOWANCE FOR LOAN LOSSES
Changes in the allowance for loan losses were as follows:
(In thousands) 1991 1990

Balanceat beginningof year ........................................... $3,794 $7,865
Provisionfor loanlosses.................................................. 495 3,271
LoarLschargedoff ............................................................. (2,187) (8,480)
Recoveries.......................................................................... 891 1,138
Balanceat endof year ...................................................... $2,993 $3,794

NOTE F: POLICY ACQUISITION COSTS
Policy acquisition costs information is summarized as follo~
(In thousands) 1991 1990
Policyacquisitioncosts incurred
Commissionand brokerage....................... $25354 $19,931
Premiumhxes .............................................. 43,163 34,451
Salaries, directmail selling
and other.................................................... 107650 92139
-
$176367 =
- -
.
Policyacquisitioncosts
expensed.................................................... $162,115
-
During 1988 and 1989, GEICO converted its automobile p
six-month premium term from a twelve-month term. Sh
shorter premium term means that certain acquisition costs f
direct mail selling and other costs are expensed over s
instead of twelve months. It is estimated that this i
amortization increased policy acquisition costs expensed
$3.6 million.
Additionally, policy acquisition costs expensed in 1989 i]
million for estimated unrecoverable Medicare Supplement
costs. The Corporation has withdrawn from this market a
Medicare Supplement business to an unrelated health
company effective January 1,1990.
NOTE G: POTENTIAL PREMIUM REFUNDS
On November 8,1988 California voters passed Proposition
called for significmt rate reductions and certain changes in
insurance laws. The State Supreme Court upheld m
regulatory scheme but allowed insurers to earn a fair and
return. In 1989 the California Department of Insurani
GEICO to refund $14.3 million based on calculations c
GEICO purportedly earned in excess of a fair and reasona
Because of the outstanding order, a provision for $14.3 n
charged to operations in 1989. Based on data requested in 1
Insurance Commissioner and certain changes to regulation
possible premium refunds, an additional $13.4 million pro
charged to operations in 1990 bringing the recorded Iiabili
million.
In 1991 the new Insurance Commissioner, elected in
issued emergency orders to individud California auto i
make policyholder refunds based on 1989 premiums. The
were based on calctiations that included a 10% cap on rat
and ordered refund amounts well in excess of the maxim
premium stated in Proposition 103. GEICO has received :
refund premium and accrued interest of $56.2 million. C
pursue all available legal remedies to resist this unreas
der and, accordingly, results for 1991 do not include any
charge against earnings,
OTEH: DEBT
sbt consists of the following
December31,
!f120zcsands)
lrporateand Other
iICOCorporationusecured debt -
.3 l/2%Debentures,due in annual installments
from1989 to 1994- repaidin 1991...........................
,1%Debenturesdue 1999, annual sinkingfund
requkement 1990to 1999of 10%of amount
outstandingJanuary1990 (net of Debentures
heldin trexury) - repaidin1991 ............................
1.15%Dekntures due2021 .........................................
lICOcollateralizeddebt -
1.53%note, $375 due semi-annually,
balanceof $7,875due in 1999....................................
llaterdized debt of real estatesubsidimies-
;EICO Properties,Inc.:
8 1/4%notes, due in equafquarterlyinstallments
of $339includinginterest, unti 2004....................
8 1/2% note, due in equafquarterlyinstallments
of $196 includinginterest,until 2004....................
Other ............................................................................
;EICO WashingtonProperties,Inc.:
9 3/8% note, due in equal monti y instilments
of $203includinginterest,until 2010....................
.manteedbanklo-of EmployeeStock
)wnershipTrust............................................................
Total corporateand other debt...........................
uce Company- GEFCO UnsecuredDebt
rrowingsunder credit agreement,guaranteedby
lEICOCorporation
9.27%senior notes, due in 1991................................
5.13%senior notes, due in 1992................................
5.19%senior notes, due in 1992 ...............................
9.05%senior notes, due in 1992................................
9.44%senior notes, due in 1992................................
9.89%senior notes, due in 1992..,.............................
Ier
Commercialpaper, guaranteed
by GEICOCorporation........................................
Vmiablerate seniornotes, due in
quarterlyinstallmentsof $938until
1991 (8.997%rate at 12/31/90) ..........................
5.94%senior notes, due in 1992, guaranteed
by GEICOCorporation........................................
123/4%senior notes, due in annual
installmentsof $3,000until 1992,
gu=anteed by GEICOCorporation...................
Toti financecompanydebt ...............................
Total debt...............................................................
1991
$

99,603
13,500
10,501
6,012
97
21,368
50000
~
201081
-

22,000
6,000
25,000
10,000
12,000

20,000
3,000
98,000
$299,081
1990
$16,670
53,511
---
14,250
10,965
6,272
---
21,781
50,000
173449
-
10,000
---
---
25,000
10,000
12,000
40,600
3,750
---
6,000
107,350
$280,799
DEBT AGREEMENTS
At December 31, 1991 the Corporation and GEFCO had a credit
agreement under which GEFCO had borrowed a total of $75 million.
In February 1992 the credit agreement was replaced with a new
revolving credit facility under which the Corporation and GEFCO can
borrow up to $150 million and $100 million, respectively, with total
borrowings not to exceed $150 million. The amount which may be
borrowed is reduced by $50 million every three months beginning
November 1994 until the facility terminates in May 1995, The
agreement provides several options for interest and repayment terms
and a facility fee of 18.75 basis points per annum, Amounts borrowed
by GEFCO under the agreement are guaranteed by GEICO
Corporation.
At December 31, 1991, GEFCO had an unused bard( line of credit
totaling $13.0 million which is available for additional b~
borrowings. The bank line of credit agreement provides that GEFCO
pay an annual commitment fee of 1/4 of 1% of the btis credit line.
Interest of $27,3 million, $30.3 million and $31.4 million was paid
during 1991,1990 and 1989, respectively.
DEBT MATURITIES
The aggregate maturities of consolidated debt for the years 1992
through 1996 are $106.0 million, $8.1 million, $10.3 million, $10.4
million and $9.8 million, respectively.
COLLATERALIZED DEBT
Property with a cost of $58.4 million has been pledged as collateral for
the notes of GEICO and the real estate subsidiaries and long-term
leases have been assigned as additions collateral.
NOTE 1 : SAVINGS DEPOSITS
Savings deposits are held by GEIBank Industrial B~, a subsidiary of
GEFCO. GEIBank is in the process of liquidating all remaining
deposit liabilities by paying them off or transferring them to anotier
institution. This liquidation should be completed during 1992,
NOTEJ: FEDERAL INCOME TAXES
FEDERAL INCOME TAX PROVISION
The federal income tax provision has been computed upon pretax
financial reporting income as follows:
(In thousands) 1991 1990 1989
Tax expense &nefit) on
Tax basis income .................................... $74,186 $69,649 $66,295
Timing differences.................................. (29>72) (55,282) (23,919)

Federal incometax provision........... $44,614 $14,367 $42,376

Federal income taxes of $ 6 6 . 7million, $80,6 million and $57.2 million
were paid during 1991,1990 and 1989, respectively.
EFFECTIVE FEDERAL TAX RATE RECONCILIATION
A reconciliation of the effective federal income tax rates in the
consolidated statement of income to the federal income tax rate of
34% is as follows:
(In fhowands) 1991 1989 1990
Incometax provisionat 34%
of pretaxincome................................... $ 81,938 $ 75,755 $ 86,846
Effect ok
Tax-exemptinterestincome............... (31,734) (30,899) (30,636)
Dividendsreceiveddeduction........... (6,900) (7,786) (8,706)
Prorationof investmentincome......... 3,091 2,900 2,483
Fresh start adjustments....................... (2>55) (26,194) (5,406)
Other items .......................................... 774 591 (2,205)
.
Federal incometax provision........... $ 44,614 $ 14,367 $ 42,376
- -
The federal income tax provision for 1991,1990 and 1989 was reduced
by $2.6 million, $4.0 million and $5.4 million, respectively, for the
benefit of the fresh start adjustment to initially discount reserves at
January 1,1987 as required by the Tax Reform Act of 1986. Under the
accounting rules currently used by the Corporation future earnings
will also benefit, but to a decreasing extent.
The Revenue Reconciliation Act of 1990 (The Act) included
provisions to tax discowted salvage and subrogation recoveries on an
accrual basis, rather than when received, effective January 1, 1990.
The Act provides for a fresh start adjustment to exclude 87% of the
discomted salvage and subrogation recoverable at December 31,1989
from taxation, and the remaining 13% is reported as t=able income
over four years beginning in 1990. Accordingly, the 1990 federal
income tax provision has been reduced by $22.2 million to reverse
deferred taxes previously recorded on the portion of salvage and
subrogation recoverable at December 31, 1989 which is now exempt
from taxation.
DEFERRED FEDERAL INCOME TAX BENEFIT
The deferred federal income tax benefit resulted fro]
differences in recognition of revenue and expenses for
financial statement purposes as follows:
(In fhousands) 1991 1990
Deferralof policyacquisitioncosts.........
Unearnedpremiums ................................
Discountingof reserves............................
Salvageand subrogationfreshstart........
Deferredcompensation............................
Taxbenefit hansfer leases........................
Other policyliabilities...............................
Affiliatesundistributedearnings...........
Otier ............................................................
Deferredfederal incometax benefit ....
$ 5,135
(13,955)
(8,929)

(7,416)
(585)
(520)
1,203
(4,505)
$ (29,572)

$ 2,411
(11,511)
(8,497)
(22,184)
(1,785)
(468)
(7,100)
(2,694)
(3,454)
$(55,282)
FEDERAL TAX LIABILI~ (ASSET)
The components of the federd income tax liability (asset) in
the financial statements are as follows:
Decen
(Inthousands) 1991
Currenttax payable(recoverable)................................... $ 5,821
Deferredtax liability(asset)............................................. (86,318)
Deferredtaxrelatedto mealized
82,856
appreciationon equib secwities.--.....
Federd incometax liability(asset).................................. $ 2,359
TAXATION OF LIFE INSURANCE SUBSIDIARIES
Prior to the T= Reform Act of 1984, a portion of the life
subsidiaries statuto~ income was not subject to curre]
taxation, but was accumulated in an account c
Policyholders Surplus Account. The aggregate balanl
million in this account would be taxed at applicable current
if distributed to stockholders or if the account exceeded a :
maximum. No federal income taxes have been provid~
amount since, in managements opinion, the conditions un
such taxes would be incurred are not probable.
OTEK: SHAREHOLDERS EQUITY
iARE ACQUISITIONS
n February 27, 1991, the Board of Directors authorized the purchase
up to 1,000,000 shares of the Corporations Common Stock from
ne to time depending on market conditions.
The Corporation purchased 700,070; 343,864 and 294,101 shares of
]mmon Stock in 1991, 1990 and 1989, respectively, for an aggregate
st of $116.3 million, $48.7 million and $39.9 million. Subsequent to
?cember 31, 1991 the Corporation has purchased an additional
,346 shares for $8.9 million.
As of December 31, 1991 and February 18, 1992, 853,548 and
9,202 shares, respectively, remain under the current repurchase
.thorization.
;OCK OPTIONS AND STOCK APPRECIATION RIGHTS
~der the Corporations 1973 Stock Option Planr options were
anted to officers and key employees for the purchase of Common
~ck at 100% or more of fair market value at date of grant. Exercises
options during 1991, 1990 and 1989 were 3,500; 4,100 and 8,090,
jpectively, at prices from $11.88 to $23.50 per share. At December
, 1991 no options were outstanding and no more options may be
anted under this plan.
Under the Corporations 1985 Stock Option Plan, options and
ated stock appreciation rights (SARS) were granted to officers and
y employees for the purchase of Common Stock at 100% or more of
e fair market value at the date of grant, The options are exercisable
installments beginning one year from the date of grant and expire
]t more than ten years and one month thereafter. Exercisable
]tione at December 31, 1991, 1990, 1989 and 1988 were 405,462;
,5,337; 290,791 and 208,140, respectively. Under the plan, an
dividual may exercise any combination of stock options and SARS
long as the aggregate number does not exceed the number of stock
]tions granted to that individud. No more options may be granted
~der this plan. Charges of $14.3 million, $4.7 million and $10.4
illion were made against 1991, 1990 and 1989 earnings, respectively,
r the SARS.
Activity under the 1985 Stock Option Plan is summarized as follows:
Options Price
Available Per Share On Optiom
For Grant Date of Grant Outstanding
Balanceat December31,1988....
Granted.........................................
Exercised.......................................
Forfeited.......................................
Balanceat December31,1989....
Granted.........................................
Exercised.......................................
Forfeited.......................................
Terminated...................................
Balanceat December31,1990 ...
Exercised.......................................
Forfeited.......................................
Balanceat December31,1991....
269,201$59.38to$121.63 445,672
(31,100) 125.50 to 148.06 31,100
---
69.00to 121.63 (17,435)
2,320 69.00to 121.63 (2,32Q
240,421 59.38 to 148.06 457,017
(33,700) 146.50to 163.38 33,700
---
69.00 to 125.50 (15,780)
480 146.50 (480)
(207,201) --- ---
---
59.38 to 163.38 474,457
---
69.00 to 146.50 (14,455)
---
121.25to 125.50 (1,260)
---
$59.38 to $163.38 458,742
Effective November 20, 1991, the Board of Directors approved a new
stock option plan, subject to approval by shareholders, whereby
options to purchase 500,000 shares of Common Stock maybe granted
to officers and key employees. The purchase price shall not be less
than 100% of the fair market value at date of grant, and the options
are exercisable in installments beginning six months from date of
grant and expire not more than ten years thereafter.
PERFORMANCE SHARES
Under the Corporations performance share plan, as approved by
shareholders, awards of performance shares may be made to key
executives to be paid in shares of the Corporations Common Stock or
cash based on the attainment of certain goals. AS of December 31,
1991,61,150 performance share awards were outstanding and 115,310
shares remained available for future awards. Charges of $5.2 million,
$3.O million and $3.8 million were made against 1991,1990 and 1989
earnings, respectively, under the plan. A total of 1,135,202 authorized
shares have been reserved for stock options, performance share
awards, and stock appreciation rights.
NOTE L EARNINGS PER SHARE
The computation of earnings per share is based on the weighted
average number of common shares assumed outstanding of
14,570,948 in 1991,15,279,405 in 1990 and 15,504,374 in 1989.
NOTEM: EMPLOYEE BENEFITS
EMPLOYEE STOCK OWNERSHIP PLAN
Substantially all employees of the Corporation and its subsidiaries are
covered under the GEICO Companies Employee Stock Ownership
Plan and Trust. The Trust may borrow money and use the proceeds
to purchase shares of the Corporations Common Stock. The
Corporation guarantees the loans and will make annual contributions
sufficient to enable the Trust to repay the loans including interest.
The obligations of the Trust, $50.0 million at December 31, 1991 and
1990, are included in the Corporations long-term debt. An amount,
representing the obligations of the Trust which have not yet been
charged to compensation expense, is deducted from shareholders
equity. Additional accrued compensation in excess of the current
year debt service is recorded as an expense based on the number of
shares allocated to participants.
The components of Employee Stock Ownership Plan expense
consist of the following
(In fhousands) 1991 1990 1989
Rticipd .................................................... $5,904 $7,492 $4,000
Interest ...................................................... 4,097 3,991 3,958
Dividendsusedfor debt service........... (1$59) (1,800) (1,603)
Additionalaccruedcompensation........ 236 76 --

EmployeeStock Ownership
Plan expense.......................................... $8,678 $9,759 $6,355
PROFIT SHARING PLANS
The Corporation has profit sharing plans covering substantially all
employees. Employer contributions of a discretionary amount are
declared by the Board of Directors based on profits. Employer
contributions of $6,3 million, $6.7 million and $3.9 million were
charged to expense in 1991,1990 and 1989, respectively.
PENSION PLAN
The Corporation and its subsidiaries have a noncontributory defined
benefit pension plan covering most ftil-time employees. The plan
provides for payment based on salary and years of service. Annual
contributions to the plan are based on amounts determined by
consulting actuaries. Plan assets at December 31, 1991 consist
primarily of common stocks and U.S. Government obligations.
Pension expense (income) is as follows:
(In thousands) 1991 1990 1989
Servicecost - benefitsearned
duringthe year ..................................... $4,631 $ 4,015 $ 3,090
Interest cost on projectedben<lt
obligation ............................................... 9,550 8,313 6,576
Actual returnon planassets.................. (46,133) 1,810 (24,100)
Amortizationof net asset existingat
JarluMy 1,1986 ...................................... (3,426) (3,426) (3,426)
Other amortizationand deferral........... 34,962
--
15185
Net pensionexpense (income)..............
MM=
The funded status of the plan was as follows:
(In thousands)
Actuarialpresentvalueof benefit obligations:
Vested........................................................................
Non-vested...............................................................
Accurntiatedbenefitobligation..........................
Effect of projectedfuturesalaryincreases...........
Rejected benefit obligation ..................................
Plan assetsat market value........................................
Planassets in excessof projectedbenefit
obligation ..................................................................
Unrecognizednet gain ...............................................
Unrecognizedprior servicecosts..............................
Unrecognizednet asset at January1,1986
beingrecognizedover elevenyears.......................
Pensionasset ...............................................................
December31,
1991 1!
$83,525 $69,<
1,692 ~
85,217 70,[
45,842 35
131,059 106,74]
181,507 ~
1
50,448
I
32,33
(24,837) (4,67
2,454 3,4
$10,532 ~

The projected benefit obligation was determined using an assure
discount rate of 8% for 1991 and 8.5% for 1990, and an assumed 10i
term rate of return on plan assets of 8.5% and assumed aver:
annual salary increases of 6.7% in both 1991 and 1990. 1
NOTE N: REINSURANCE
The Corporations insurance subsidiaries are involved in both i
cession and assumption of reinsurance with other compani
Reinsurance treaties are maintained for the purpose of insuring exe,
and catastrophe risks of the subsidiaries and a portion of most ri~
for Resolute Reinsurance Company. The Corporation and ~
insurance subsidiaries remain liable to the extent the reinsuri
companies are unable to meet their treaty obligations; howev
certain amounts ceded are supported by letters of credit or al
indemnified. Amounts deducted from policy liabilities and premi~
and loss accounts for reinsurance cessions of the property a
casualtv insurance subsidiaries, excluding the effect of reinsurm
facilities, are * follows:
(In thousands)
Policyliabilities
Loss andloss adjustment
expensereserves......................................
Unearnedpremiumreserve......................
Premiumswritten ..................................
Premiumsearned....................................
Loss and loss adjustment
expenseincurred..................................
December31,
1991 1990
$128,196 $126,443
12,184 12,903
I
1991 1990 ~
$18,015 $16,050 $14,6
19,106 16,291 15,2
17,715 15,524 20,4
10TE O: BUSINESS SEGMENTS
heCorporation isprincipally engaged in the following industries:
roperty and casualty insurance, reinsurance, life and health
~urance, and finance. Segment information is summarized as
Propertyand casualtyinsurance.......
Reinsurance..........................................
Life and healthinsurance....................
Ftice ...................................................
Other......................................................
Segment revenue...............................
Corporate,affiliatesand
elimination .........................................
Totaf revenue ....................................
Iperatingearningsbefore incometaxes:
Propertyand casualtyinsurance.......
Reinsurance..........................................
Life andhealthinsurance....................
F~ce ...................................................
Other .....................................................
Segment operatingearningsbefore
incometaxes..................................
Corporate,affiliates,and
eliminations.......................................
Operatingearningsbefore income
twes .................................................
identifiable asse&
Propertyand casualtyinsurance.......
Retiurace ...........................................
Life and healthinsurance, ...................
Ftice ...................................................
Other ......................................................
Segment assets...................................
Corporate,affiliates,and
elimitations.........................................
:s.........................................
1991 1990 1989
$2,065,203 $1,851,329 $1,811,605
4,450 4,762 5,667
33,680 25,496 51,229
22,941 27,508 31,229
11,768 9,812 15,794
2,138,0421,918,9071,915,524
8,985 15,970 23,865
$2,147,027 $1,934,877 $1,939,389
$ 280/130$ 234639 $ 270,388
(6,899) (3,876) 32
6,240 5,192 (3,340)
(863)
3) z
797
279,502 231,291 267,014
~~~
$ 240,994$ 222,808$ 255,429
$3,621,528 $3,082,259 $2,822,464
60,893 65,759 68,774
162,564 142,135 148,235
145,245 177,209 212,637
35,645 38,840 41,886
4,025,8753,506,2023,293,996
59,964 69,738 140,376
$4,085,839 $3,575,940 $3,434,372
NOTE P: COMMITMENTS AND CONTINGENCIES
Rental expense for all leases was $19.9 million in 1991, $17.8 million in
1990 and $16.2 million in 1989.
The Corporation and its subsidiaries have entered into
noncancellable leases expiring at various dates through 1998 for both
real estate and equipment, all of which are operating leases. The
future minimum rental commitments as of December 31, 1991 for
noncancellable leases with a remaining term of at least one year are as
follows:
(In thousands)
1992 ..................................... $ 8,982
1993 ..................................... 6,272
1994 ...................................... 1,316
1995 ...................................... 571
1996 ...................................... 216
195 1997 and after ....................
$17,552
The Corporation plans to pursue the development of its GEICO Plaza
headquarters property aIthough activity regarding the expansion has
been deferred pending resolution of several issues including county
construction of a new street. Additionally the Corporation plans to
construct a new regional office building of approximately 350,000
square feet in Stafford County, Virginia.
In the ordinary course of its insurance operations, the Corporation
is affected by various regulatory, legislative and judicial actions. In
the opinion of management, loss to the Corporation materially in
excess of amounts provided for in the financial statements as a result
of any such actions is not probable.
NOTE Q SUBSEQUENT EVENT
On February 26,1992, the Corporations Board of Directors proposed
a five-for-one stock split. The stock split is subject to shareholder
approval of an increase in the number of authorized shares of
Common Stock from 60 million to 150 million. Shareholders will vote
on the proposed increase at the Corporations annual meeting on May
20, 1992 and, if approved, the stock split is expected to become
effective on or shortly after that date. Par value of the Common Stock
will remain at $1.00. As a consequence of the split approximately
$56.8 million, representing the aggregate par value of the additional
sbes, will be transferred from paid-in surplus to the common stock
account. The Corporation plans to retire its Treasury Stock prior to the
stock split.
GEICO CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
QUARTERLY HIGHLIGHTSOF OPERATING RESULTS (UNAUDITED)
(In millions, except per skre results)
Revenue
Premiums..................................................................................
Net investmentincome...........................................................
Realizedgains (losses)on investments . ................................
Interest on loans receivable....................................................
Affiliatesand other ..................................................................
Total Revenue....................................................................
Benefits and Expenses
Losses and loss adjustmentexpenses....................................
Life benefitsand intereston policyholdersfunds..............
Policyacquisitionexpenses....................................................
Other operatingexpenses.......................................................
Potential premiumrehds .....................................................
Dividendsto policyholders....................................................
Interest expeme........................................................................
Total Benefits and @enses ...........................................
Net Income Before IncomeTaxes ..........................................
Federal income tax expense @nefit) ....................................
Net Income ...............................................................................
Net Income PerShare.............................................................
1991
Three Months Ended
Dec. 31 June 30 Mar. 31
M__
$500.1 $ 487.4 $461.1 $ 439.8
49.9 47.6 47.9 45.9
6.8 14.2 9.4 (1.1)
4.7 4.8 5.2 5.3
4.4 . . . 37 42 57
565.9 557.7 527.8 495.6
_ . _
373.3 372.7 364.7 339.4
5.7 4.6 4.9 4.5
43.6 42.0 39.8 36.8
57.4 53.2 48.7 57.3
--- . --- ---
18.4 9.0
-
7.2 7.3 . 74 8.2
505.6 488.8 465.5 446.2

60.3 68.9 62.3 49.4
11.3 13.2 11.5 8.5
_ . _
$ 49.0 $ 55.7 $ 50.8 $ 40.9


$ 3.39 $ 3.83 $ 3.49 $ 2.79
1990
Three Months Ended
Dec. 31 Sept. 30 June 30 Mar.
.
$440.9
50.1
(11.1)
5.3
7.3
492.5
345.6
6.1
35.3
56.8
---
6.3
83
-
458.4
34.1
m
$ 54.8
$ 3.64
$ 431.8 $422.0 $397
43.4 42.5 41
3.7 13.9 13
5.5 6.1 6
52 48
-
A
-
489.6 4893 463
-
320.7 333.5 328
5.4 4.5 (2
34.2 34.4 35
34.3 50.5 38
13.4 --- --
---
6.9 81 ~
-
414.9 431.0 407

74.7 58.3 55
15.7 10.0 9
.
$ 59.0 $ 48.3 $ 46


$ 3.87 $ 3.15 $ 3.
INANCIAL ACCOUNTING STANDARDS BOARD STATEMENTS
WPLOYERS ACCOUNTING FOR POSTRETIREMENT
ENEFITS OTHER THAN PENSIONS - STATEMENT NO. 106
atement 106 establishes standards of financial accounting and
porting for employers that offer postretirement benefits other
an pensions to its employees. The Statement will change the
evalent current practice of accounting for these benefits, such as
?alth care and life insurance plans for retirees, from a pay-as-
]u-go cash basis to require accrual of the expense over the period
at the employee works to earn the benefit.
The Corporation is currently accumtiating data related to
health insurance for early retirees and life insurance for all
retirees. Based on preliminary estimates, the accumulated
postretirement benefit obligation for these benefits approximates
$3 million to $5 million.
The new rules are effective for 1993. Companies have the
option of recognizing the transition obligation as the cumulative
effect of an accounting change or prospectively over future
periods as a component of the annual benefit expense.
ISCLOSURES ABOUT FAIR VALUE OF FINANCIAL
J STRUMENTS - STATEMENT NO. 107
US Statement requires all entities to disclose the fair value of defined as the amount at which a financial instrument could be
~ancial instruments in the footnotes to financial statements. The exchanged in a current transaction between willing parties, other
quirement applies to financial instruments that are either assets than in a forced liquidation or sale. Statement 107 is effective for
~liabilities, both on and off the balance sheet, Fair value is 1992 year-end financial statements.
a
,CCOUNTING FOR INCOME TAXES - STATEMENT NO. 109
tatement 109 was issued in early 1992 and supersedes Statement
6 Accounting for Income Taxes. Statement 96 was issued in
)ecember 1987 and its effective date had been delayed several
mes while the Financial Accounting Standards Board considered
squests to change the criteria for recognition and measurement of
eferred tax assets and reduce its complexity. The Corporation
mrently accounts for income taxes using the deferred method
ursuant to APB Opinion No. 11.
Statement 109 will require a change from the deferred
~ethod of accounting for deferred taxes to the liability method.
he liability method will restit in adjustment of deferred tax
ccounts to reflect the most recently enacted tax rates at which
eferred amounts will be eventually paid or recovered. The
corporation has certain deferred tax liabilities on ordinary income
rhich have been provided at 46% and 40% which would be
zduced to the current 34% rate and deferred tax liabilities on
nrealized appreciation of equity securities which have been
rovided at 287. which would be increased to the current 34% rate
n capital gains, It also appears that recognition of the remaining
fresh start benefit for discounting reserves would be accelerated
sing the liability method.
Statement 109 also includes guidelines on recognizing deferred
ax assets. Changes in the tax law since 1986 to tax a portion of
nearned premiums and discount reserves have accelerated the
m
A
reporting of income for tax purposes for property and casualty
insurance companies. These changes have increased current
taxes payable and generated deferred tax assets. The
Corporation also has other temporary differences for certain
expenses which are deducted sooner for book purposes than tax
purposes and also generate deferred tax assets.
Pursuant to Statement 109, deferred tax assets are reduced by
a valuation allowance, based on available evidence, if it is more
likely than not that some portion or all of the deferred tax asset
will not be realized. The realization of deferred tax assets created
by deductible temporary differences ultimately depends upon
the existence of sufficient taxable income within the
carryforward, carryback period available under the tax law.
Future taxable income may be considered in determining if a
valuation allowance is necessq. A strong earnings history is an
example of positive evidence that can support a conclusion that
no allowance and therefore no reduction to income would be
necessary.
Statement 109 is effective for 1993. Financial statements for
prior periods may be restated, and the cumulative effect for years
not restated will be presented as a separate line item in the
Statement of Income. There are several implementation issues
which require further consideration by the Corporation prior to
quantifying the impact of Statement 109 at this time.
GEICO CORPORATION BOARD OF DIRECTORS
JohnH. Bretherick, Jr.
Louis A. Simpson
Retired President,
Vice Chairman of the Board,
Continental Corporation
GEICO Corporation
Norma E. Brown
Major General,
U.S. Air Force, Retired
Samuel C. Butler
Partner,
Cravath, Swaine & Moore
JamesE. Cheek
President Emeritus,
Howard University
Delano E. Lewis
President and Chief Executive Officer,
The C&P Telephone Company
Olza M. Nicely
President and Chief Executive Officer,
Government Employees InsuranceCompany
Thomas G, Pownall
Retired Chairmanof the Board,
Martin Marietta Corporation
Coleman Raphael
Retired Dean,
School of BusinessAdministration,
George Mason University
William J. Ruane
Chairman of the Board,
Ruane, Cunniff and Co., Inc.
William B. Snyder
Chairmanof the Board and
Chief Executive Officer,
GEICO Corporation
W. Reid Thompson
Chairman of the Board,
Potomac Electric Power Company
Edward H, Utley
President,
GEICO Corporation
HONORARY DIRECTOR
Lonmer A, Davidson
ChairmanEmeritus,
GEICO Corporation
IN MEMORIAM
William K. Jacobs, Jr. died July 30,1991 at the age of 83. Mr.
Jacobs was a member of our Board of Directors from 1948 until
his retirement in 1978 and an honorary director until his death.
2 0 MMITTEES OF THE BOARD
i s of December 31, 1991 GEICO Corporations Board of Directors con-
.sted of 13 members. Assisting the Board in the management of its re-
oonsibilities are five Board Committees. The names of those serving
n the Committees and primary Committee functions are as follows:
,udit Committee
V. Reid Thompson, Chair
~hn H. Bretherick, Jr. Delano E. Lewis
iorma E. Brown Coleman Raphael
I addition to recommending the appointment of the Corporations
ndependent Accountants, the Audit Committee, which is comprised
f non-management Directors, monitors the Accountants audits;
sviews the audit resdts with management and the Accountants; re-
iews the Annual Report on Form 1O-K; reviews the Corporations
~ternal controls and accounting procedures with the Accountants and
ne Internal Auditor; reviews compliance with the Corporations
,usiness Ethics Policy; and carries out actions required under the
oreign Corrupt Practices Act. The Internal Auditor reports directly to
~e Audit Committee and functions as its staff.
lxecutive Committee
amuel C, Butler, Chair
.omas G. Pownall William B. Snyder
~ouisA. Simpson W. Reid Thompson
is Cornrnittee exercises most of the powers of the Board of Directors
~en the Board is not in session; recommends plans relating to the
velopment of corporate structure; reviews proposals regarding
:rger or affiliation with other companies; reviews proposals to enter
w or expanded lines of business; and analyzes corporate practices
volving disclosure.
nance Committee
luis A. Simpson, Ckir
hn H. Bretherick, jr.
mes E. Cheek Coleman Raphael
~lanoE. Lewis William J. Ruane
~e Finance Committee approves broad investment policies and
[idelines and assists the Corporations Investment Advisor in their
:velopment; approves and monitors eligible securities; approves all
arketable investments and non-marketable investments in con-
~lled operating units of $25 million or more and in non-controlled
)erating units of $5 million or more; monitors the portfolio to per-
rm the fiduciary responsibilities of the Board, keeping in mind the
akeup of the Corporations liabilities; monitors the investment port-
Iio and its performance relative to comparative standards; autho-
zes the purchase, conversion, transfer and sale of stocks, bonds and
: other securities within prescribed guidelines; and approves bor-
Iwings by the Corporation of up to $50 million.
Human Resources Committee
Samuel C. Butler, Chrzir
John H. Bretherick, Jr. William J. Ruane
Thomas G. PownaU W. Reid Thompson
This Committee reviews programs relating to the development of
human resources, including personnel and compensation practices,
education and training programs and the introduction of external
resources (both the hiring of new associates and retention of consul-
tants). It recommends to the Board the compensation of the senior
officers of the Corporation and GEICO and the Presidents of the
affiliated companies and reviews the annual budget for officers
salaries; approves and administers compensation programs; maintains
responsibility for administration of employee benefit plans; approves
or recommends to the Board amendments to the employee benefit
plans; elects all officers of the Corporation and GEICO, except the
Chairman of the Board, Vice Chairman of the Board, Chief Executive
Officer, President, Executive Vice President and Senior Vice President
and Senior Officers of affiliated companies; reviews managements or-
ganizational plans; and approves Directors compensation. The
Committee also recommends proposed nominees for election to the
Board by the shareholders at the Amual Meeting or by the Board to
fill an existing vacancy.
Social Responsibility Committee
Norma E. Brown, Chair
James E. Cheek Edward H, Utley
Olza M. Nicely
This Committee oversees the fulfillment of social responsibilities to
shareholders, policyholders, associates and the general public; reviews
the Affirmative Action Program with respect to employment and
upward mobility of females, minorities and disadvantaged segments
of society; monitors involvement in political action, particularly with
respect to state legislative affairs; and reviews responsibilities to
society in the providing of insurance services and allocating charitable
contributions.
SENIOR OFFICERS OF GEICO CORPORATION AND ITS AFFILIATES
Government Employees
William B. Snyder
Insurance Company
Chairman
Oka M. Nicely
President and
Chi~Execufive Oficer
SeniorVice Presidents
MarionE.Byrd
Noel A. Mdomet
DonaldK.Smiw General Counsel
W. AlvonSparks, Jr.*
EdwardH. Utley
Group Vice President
AugustP. Alegi*
Vice Presidents
MartinAdler,Actuary
AndreaM. Covd? Ls@lative Gunsel
Charles R. Davies*
CarrollR. Franklin*
WilliamG. Griswold
DonaldD. Hansen
James M. Hitt
James F. Holleran
Herbert M. Holtzman,Jr.
AlvinKaltman
Merrill D. Knight, III
AlanR. Ledbetter
WilliamI. Ledman
DonaldD. Messmer
Robert M. Miller
DavidH. Pushman
DavidL. %hindler
RichardC. Van Essendelft
Thomas M. Wells,* controller
PatrickE. Wfison
Treasmr
CharlesG. Schara
Secretary
RosalindAnn Phillips*
GEICO Indemnity Company and
Criterion Casualty Company
GEICO General
Insurance Company
Government Employees
Financial Corporation
Garden State Life
Insurance Company
Merastar Insurance Company
Soutiern Heritage
Insurance Company
EdwardH. Utley
Chairman and
Chief Executive Ofjicer
JamesM. Hitt
President
William B.Snyder
Chairman
Oka M. Nicely
President and
Chief Executive Oficer
W. Alvon Sparks,Jr.
Chairman
JohnJ. Krieger
President and
Chief Executive Oflcer
William B, Snyder
Chairman
Scott K. Luchesi
President
William B. Snyder
.
Chatrman
Alvin Kaltman
President and
Chief Executive Oflcer
WiKlam B. Snyder
Chairman
Thomas W. Crawford
President and
Chie~Execu tive Oficer
GEICO Corporation
William B. Snyder
Oairman and
Chief Executive O@cer
Louis A. Simpson
Vice Chairman
EdwardH. Utley
President
*Also Oficers of GEICO
Corporation wifh title shown.
Criterion Life
Insurance Company
William B. Snyder
Chairman and
President
ANNUAL MEETING
The Amual Meeting of Shareholders of GEICO Corporation will be held on May 20,1992 at 10:00 a.m. at
GEICO Plaza, 5260 Western Avenue, Chevy Chase, Maryland.
TRANSFER AGENTS AND REGISTRARS
The Riggs National Bank of Washington, D.C. Manufacturers Hanover Trust Company
Corporate Trust Department Shareholder Relations
P. 0, BOX 96206 450West 33rd Street
Washington, D.C. 20090-6206 New York, New York
SHAREHOLDER INQUIRIES
10001
Communications concerning transfer requirements, lost certificates, dividends and change of address
shor.ddbe directed to one of the Corporations transfer agents.
STOCK EXCHANGE LIST? NG
The Corporations Common Stock is listed on the New York and Pacific Stock Exchanges. The Common
Stock trades under the symbol GEC.
STATISTICAL SUPPLEMENT
A statistical supplement for GEICO Corporation containing details of certain financial and other data
which are summarized in this report is available to shareholders and other interested parties upon written
request to the Office of the Secretary.
INDEPENDENT AUDITORS
The financial statements contained in this report have been examined by Coopers & Lybrand, GEICO
Corporations independent auditors. Coopers & Lybrand has been appointed by the Board of Directors,
subject to ratification by the shareholders, to examine the Corporations 1992 financial statements. A repre-
sentative of Coopers & Lybrand will be present at the Annual Meeting.
FORM IO-K
The Corporations Annual Report on Form 1O-K, as filed with the Securities and Exchange Commission,
will be available after March 31,1992 without charge to shareholders, upon written request to:
Rosalind Ann Phillips
Corporate Secretary
GEICO Corporation
One GEICO Plaza
Washington, D,C. 20076-0001
This report and the financial statements herein have been published for the general information of share-
holders of GEICO Corporation and are not intended to induce any purchase or sale of securities.
This report was printed on recycled paper.