• by Karlene Lukovitz  @KLmarketdaily, March 16, 2023

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.