4 largest P/C insurers slash ad spending in 2022

The four largest personal lines property and casualty insurers lowered their advertising spend in 2022, in part to offset the rising costs associated with elevated claims, S&P Global Market Intelligence reported.

GEICO Corp. reported a year-over-year decrease of roughly 38% in total advertising expenditure during 2022, the highest among the Big 4 auto insurers, according to analysis of regulatory data by S&P Global Market Intelligence.

The Berkshire Hathaway Inc. company reported $1.28 billion in total advertising expenditures in 2022, roughly $800 million less than it spent in the prior year. The insurer's substantial decrease in ad spending allowed The Progressive Corp. to become the largest spender among the group in 2022.

Progressive spent the most on advertising

Progressive's property and casualty subsidiaries logged $1.73 billion in advertising expenses in 2022, representing a 7.6% decline from the $1.87 billion it reported in 2021.

The pull-back in total media spend was a result of the insurer's effort to hit its internal profitability target of a 96% combined ratio, according to Progressive CEO Susan Griffith. Griffith said the insurer is constantly evaluating its media spend and will use it efficiently moving into 2023 as it looks to exploit the current hard market.

Progressive CFO John Sauerland said reviewing the insurer's expense ratio would be a "great indicator" that the company is spending more on advertising at the start 2023. In January, its net expense ratio jumped to 20.2% compared to the 17.3% it reported in December 2022 and 19.6% in January of 2022.

Allstate's ad spend falls below $1B

The Allstate Corp.'s total ad spend fell below $1 billion in 2022, after surpassing that figure during the previous two years. The insurer spent roughly $950 million in advertising during the most recent year, a decrease of 26.9% from the prior year.

While not a direct correlation to advertising spending, the insurer did experience a small year-over-year increase within its homeowners and private auto lines of business in 2022, up 1.4% and 0.5% from the prior year. The insurer noted within its most recent Form 10-K 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 continues to reduce adverting expenses

State Farm Mutual Automobile Insurance Co. and its affiliates spent roughly $1.01 billion on advertising in 2022, down from $1.07 billion in 2021 and off the five-year peak of $1.21 billion in 2019.