Geico skimped on IT while Progressive priced smarter, and lost the No. 2 spot

In a Fortune column on 30 December 2025, investor Adam Seessel argues that Warren Buffett's blind spot on technology hurt Berkshire Hathaway's operating companies, with Geico as the main example. After Buffett took full control in 1996 he octupled Geico's marketing budget, and its market share grew from under 3% to 12% by 2020, lifting it from No. 7 to No. 2 behind State Farm.

Seessel says Progressive meanwhile invested in technology from the late 1970s, became the first auto insurer to sell online in 1996, and built tools such as the Snapshot driving monitor. Geico's no-agent model gave it operating costs about six points lower, but Progressive's loss costs were about 11 points better, so tech had breached Geico's low-cost moat. Geico has more than 600 legacy IT systems and, he writes, did not start on a Snapshot-like product until 2019.

He argues COVID exposed the gap: driving collapsed and then rebounded more recklessly, and repair inflation hit, which favoured insurers with strong tracking tools. Since 2020 Progressive has almost doubled its personal auto policy count while Geico lost nearly 15% of its personal insurance base, leaving Progressive the No. 2 auto insurer. This is the author's analysis, not a company statement.

Berkshire preferred to take cash out of operating subsidiaries rather than reinvest in them for the digital age, in the column's account.

Geico spent on marketing (the gecko, the caveman) while Progressive spent on pricing and claims technology that cut loss costs, the biggest cost in auto insurance.

Geico ran over 600 legacy IT systems, which slows rate changes; Progressive says it can adjust rates nearly every business day.

Geico started a usage-based product in 2019, about 20 years after Progressive began, so it had far less driver data when conditions shifted.

A cost moat is not permanent. If you spend on brand but not on the systems that price risk, a rival that does can erase your cost advantage and take the customers.

By the column's count, Progressive is now the nation's No. 2 auto insurer, having almost doubled personal auto policies since 2020, while Geico's personal insurance base is down nearly 15%. The author compares Geico to General Motors and Macy's as legacy companies caught in a vicious cycle of under-investment. The piece does not report any response from Geico or Berkshire.