Insurance Industry Magnate
After being passed over for president in 1975, Byrne quit to become chief executive of GEICO, then a troubled Washington, D.C. auto insurer. GEICO sold insurance directly to low-risk drivers, but had begun to lose money after underwriting riskier drivers. The company's shares had declined and regulators wanted to shut it down.
Byrne fired more than 1,500 employees, reducing the staff to fewer than 6,400, and closed 23 sales offices. It also stopped writing policies in several states.
GEICO had a turnaround as a result of these measures, which attracted the attention of investor Warren Buffett. He bought a position in the company and eventually his Berkshire Hathaway acquired the company. He has called Byrne the "Babe Ruth of insurance."
In 1985, Byrne was invited to run the troubled Fireman's Fund, then a subsidiary of American Express. Fireman's had incurred $356 million in pretax losses in 1983 and 1984. Byrne vastly improved Fireman's financial performance and initiated a public offering of some of Fireman's shares in 1985. The company was sold to Allianz AG in 1991. Byrne retained the Fireman's holding company, which he later renamed as White Mountains Insurance Group.
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