Geico Slashed 2022 Ad Spend 38%, Other Big Insurers Also Down

The four largest personal property and casualty insurers cut advertising spending significantly last year, in part to offset rising costs due to the growing number of climate-driven natural disasters. 

Berkshire Hathaway-owned Geico -- which recently dropped its longtime media agency, Horizon Media -- slashed spend by about $800 million, or 38%, for a total $1.28 in advertising last year, according to an analysis by S&P Global Market Intelligence.

That allowed Progressive to surpass Geico to become the No. 1 advertiser in the category, even though Progressive also cut its spending to $1.73 billion, down 7.6% from 2021’s $1.87 billion.

Insurance companies must report advertising spending data as part of annual industry compliance requirements.

Progressive cut back to help achieve an internal profitability target of a 96% combined ratio, according to CEO Susan Griffith. But based on its net expense ratio, which jumped to 20.2% in January from 17.3% in December 2022, the company appears to be spending more on advertising so far this year.

Allstate cut ad spend by nearly 27%, to $950 million, last year, after spending more than $1 billion in each of the two previous years.

Allstate reported gains of 1.4% and 0.5% in homeowners and private auto insurance businessses in 2022, but in its most recent 10-K filing noted that its number of in-force policies may fall as it tries to improve profitability through rate actions, along with a temporary reduction in its ad spend.

State Farm and its affiliates spent about $1.01 billion on advertising in 2022, down from $1.07 billion in 2021 and off a five-year peak of $1.21 billion in 2019.

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