Rising Costs Force ‘Big 4’ US Insurers To Slash 2022 Advertising Spending

Financial information services company S&P Global Market Intelligence says the cost of elevated insurance claims reduced the advertising budgets of the USA’s four largest personal lines property and casualty insurers in 2022.

According to analysis of regulatory data by S&P Global, GEICO reported a year-over-year decrease of around 38 per cent in advertising expenditure during 2022, the highest among the ‘Big 4’ car insurers. The Berkshire Hathaway company spent US$1.28 billion on advertising – around US$800 million less than in 2021. The decrease elevated competitor Progressive Corporation to the largest Big 4 spender in 2022.

S&P Global’s Jason Woleben said Progressive’s property and casualty subsidiaries spent US$1.73 billion in advertising in 2022 – a 7.6 per cent decline from the US$1.87 billion it spent in 2021.

Allstate’s spend fell below US$1 billion after surpassing that figure in 2020 and 2021. The company spent approximately US$950 million in advertising during 2022, which is 26.9 per cent down on the previous year’s figure.

“While not a direct correlation to advertising spending, [Allstate] did experience a small year-over-year increase within its homeowners and private auto lines of business in 2022, up 1.4 per cent and 0.5 per cent from the prior year,” said Woleben. “The insurer 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 Mutual Automobile Insurance Company and its affiliates spent roughly US$1.01 billion on advertising in 2022, down from US$1.07 billion in 2021 and off a five-year peak of US$1.21 billion in 2019.