Insurance Advertising — Dropping

Insurers are cutting their marketing budgets. That’s the conclusion of S&P Global Market Intelligence after the company examined the marketing budgets of the four largest personal lines insurers. GEICO State Farm, Progressive and Allstate are the four discussed in the report. They have the highest premium income.

So you won’t be seeing as much of Progressive’s Flo, the GEICO Gecko, Allstate’s Mayhem Man or basketball legend, Chris Paul and the new Jake of State Farm. 

Rising claims costs from private passenger autos and natural disasters, and the high cost of doing business are the reasons for those cuts.

GEICO leads the pack with the biggest cut year-over-year. The Berkshire Hathaway company cut marketing spending by 38%. The money in that 38% is a huge number. In 2022, GEICO spent $1.28 billion on advertising.

Berkshire Hathaway’s underwriting saw an after-tax-loss of $90 million. Compare that to profits of $728 million in 2021 and $657 million in 2022.

GEICO’s 38% cut totals $800 million.

The cuts moved Progressive into the top insurance marketing spender. Progressive spent $1.73 billion. The drop is 7.6% and isn’t close to GEICO’s 38%. However, it is an impressive cut. In 2021, Progressive spent $1.87 billion on advertising.

The company’s CEO, Susan Griffith said the $1.73 billion number is not set in stone. Progressive will continue to monitor marketing results and could make more adjustments as the year progresses.

Allstate’s advertising budget dropped in 2022 to $950 million. That’s down 26.9% from 2021.

State Farm spent $1.01 billion on advertising in 2022. That’s a small drop from 2021’s $1.07 billion. It is — however — way down from the company’s five-year peak of $1.21 billion in 2019.

Source link: Insurance Business America —

Source link: Business Insurance —

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