Geico spent more money on advertising than any other insurance company in the U.S, expending a whopping $935.1 million in 2013 alone, according to Nomura.
The second biggest advertiser was
Allstate Corp., who had a budget of $654.8 million - about $280 million less than Geico.
In addition to this almost 30% gap, Geico’s aggressive advertising strategy led to the insurer spending almost $100 million more on advertising than each company ranked 6-10 combined.
“
Berkshire Hathaway’s auto-insurance company Geico has been a growth machine in recent years and the advertising data show just how important good advertising is to growth,” said Nomura.
Geico enjoyed 11.2% growth in personal lines in 2013, which is slightly over the 2% growth rate it experienced the previous year.
Although Allstate lagged behind Geico, it still increased its advertising budget for the second year in a row, and its Esurance brand now boasts that “seven and a half minutes could save you on car insurance” – a direct challenge to Geico’s well-known “15 minutes could save you 15% or more on car insurance” campaign.
Still, Allstate,
State Farm, and Progressive find themselves lagging behind Geico’s success.
“Esurance is growing rapidly, but still working off a relatively small base and generating an underwriting loss for Allstate,” said Nomura.
The firm acknowledged that Progressive is facing the same pressures from its competitor.
Referring to the Berkshire Hathaway auto insurance company, it notes that Geico has “consistently been outpacing [Progressive] in almost every growth and underwriting metric.”
The top 10 advertisers in 2013 were:
1. Berkshire Hathaway: (Geico): $935.1 million
2. Allstate Crop.: $654.8 million
3. State Farm Mutual: $608.1 million
4. Progressive Corp.: $604.2 million
5. Nationwide Mutual: $296.7 million
6. Liberty Mutual: $197.0 million
7. UnitedHealth Group: $193.3 million
8. Farmers Insurance Group: $165.8 million
9. American Family Mutual: $148.7 million
10. United Services Auto Assoc.: $133.0 million
