[gbacon]

This was the insight behind the founding of GEICO, originally the Government Employees Insurance Company. The Goodwins recognized that government employees are more risk averse than the average bear. By writing policies to civil servants only, they could profitably charge lower premiums.

Geico began offering policies to the general public in 1974, so this is historical trivia now.

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>Geico began offering policies to the general public in 1974, so this is historical trivia now.

I do recall that they offered a rather significant military discount when I was a soldier. I have wonder if that discount was backed by actuarial data. I would rather expect members of the military to be higher risk than civilians or civil servants.

[gbacon]

Risk tolerance is funny in that it’s not always uniform.

The region where I live is heavy in the defense industry. There are lots and lots of veterans here. Federal Acquisition Regulations give preference to veteran-owned small businesses and also to service-disabled veteran-owned small businesses. Despite that, in a town with lots of defense and lots of veterans, there aren’t a whole lot of VOSBs.

A few years ago, the dad of a schoolmate of my son’s retired as an Army Lieutenant Colonel. Even though he as a Ranger performed parachute jumps with weapon in hand into hostile territory, he had lived in post housing all his adult life and had never had a mortgage before. The civilian world and business customs were all foreign to him despite his having interacted closely with the contracting industry for years.

We get used to what we’re exposed to. After being told for years and years to jump out of perfectly good aircraft to go blow up this-or-that target, it becomes not quite so scary. Drop the typical cake eating civilian in that world, and he’s likely wetting his pants. Drop G.I. Joe in the new world of corporate finance, contract vehicles, teaming agreements, and business development, and it can be unsettling too.