WASHINGTON — John J. Byrne Jr. — the chairman and chief executive of Geico who was credited with leading the insurance giant from near-bankruptcy to profitability in the late 1970s, an achievement that remains one of the celebrated turnarounds in modern business history — died March 7 at his home in Etna, N.H. He was 80.
His death, from cancer, was confirmed by his colleague Bob Snyder.
Mr. Byrne was for years one of the most prominent businessmen in Washington and for decades one of the most noted executives in his industry. He earned a memorable moniker from investor Warren Buffett, whose holding company, Berkshire Hathaway, has owned Geico since 1996.
Mr. Byrne, Buffett said, was ‘‘the Babe Ruth of insurance.’’
He arrived in Washington in 1976 to take over at Geico, the national auto and casualty insurer that had been a mainstay of Washington’s business scene since the Great Depression. The company was founded in Texas as the Government Employees Insurance Co., offering insurance policies for responsible motorists, and moved to the nation’s capital a year into its existence. Government workers, executives had determined, tended to be good drivers, and there were many of them to be found in Washington.
Geico opened its corporate headquarters in Chevy Chase in 1959. The company distinguished itself from other outfits by communicating with policyholders directly, rather than through agents, who earned commissions. Marketing was done simply, through measures such as direct mail. (The spunky Geico Gecko did not make its debut until 2000.)
For years, the business model worked.
But shortly before Mr. Byrne’s arrival, Geico began a decline that nearly resulted in insolvency. Insurers in general struggled amid inflation and an uptick in severe auto accidents. But Geico also had written too many high-risk policies, The Washington Post reported, and had let costs rise too high. In 1975, the company posted a net loss of $126 million.
He began working to stem the crisis shortly before leaving Travelers Insurance, where he was executive vice president, to join Geico. He helped arrange a series of secret meetings between Geico executives, competing companies who had a stake in its survival, and Maximilian Wallach, the superintendent of insurance in Washington.
The death of Geico, The Post reported, would have released $900 million in liabilities into the market.
Mr. Byrne later credited Wallach with helping to save Geico by persuading more than two dozen insurance companies to assume a portion of Geico’s policies in a ‘‘reinsurance agreement’’ that granted the struggling company a reprieve.
Mr. Byrne proposed the sale of $75 million in preferred stock, The Post reported. At a time when Geico stock values had plummeted, it seemed an unusual decision. But the company found an investor: Buffett, whom Mr. Byrne had met at a social occasion. At one point in their years-long collaboration, the Newark Star-Ledger reported, Mr. Byrne stayed up until 5 a.m. conferring with ‘‘the Oracle of Omaha.’’
In house, Mr. Byrne launched what became known as Operation Bootstrap. He shuttered about 100 offices and eliminated 3,000 of the company’s 7,000 employees. Those who remained received stock in Geico. He closed the executive dining area.
Mr. Byrne cut the number of policyholders and yanked the company’s business out of highly regulated states such as New Jersey. Rates for remaining customers went up by as much as a reported 40 percent. Bills were printed on smaller sheets of paper to save on postage.
By 1980, Geico posted $44 million in net operating income in the first nine months of the year, Forbes reported. In 1981, The Washington Post reported, Mr. Byrne was the highest-paid executive in Washington and one of the 10 highest-paid businessmen in the country.
Mr. Byrne, Buffett once said, according to Forbes, ‘‘is like the chicken farmer who rolls an ostrich egg into the henhouse and says, ‘Ladies, this is what the competition is doing.’ ’’
Mr. Byrne received a bachelor’s degree from Rutgers University in 1954 and, later, a master’s degree from the University of Michigan, both in mathematics.
In 1985, Mr. Byrne left Geico to head the Fireman’s Fund insurance company, then owned by American Express. He led it through its initial public offering and until it was acquired in the early 1990s by Allianz AG.
He kept control of the holding company, according to Bloomberg News, today known as White Mountains Insurance Group. He retired in 2008.
He leaves his wife of 54 years, Dorothy Cain Byrne; three sons; a brother; and seven grandchildren.