New NAIC data shows that while the insurer remains in third place, it is gaining on its rivals.
US third place Progressive is gaining on its rivals in terms of its share of auto insurance premiums collected across the country. This according to National Association of Insurance Commissioners (NAIC) data recently released.
While State Farm and GEICO hold their top spots, Progressive is steadily closing in on them.
According to the NAIC auto insurance premiums data, Progressive’s share rose by 1.05 percent last year, bringing it to 13.3 percent of US dollars in the private passenger market. The NAIC data included 99.38 percent of the insurance industry’s property and casualty filings.
GEICO had been keeping a strong hold on its second-place status behind State Farm. That said, last year, it did slide by 0.24 percentage points, bringing its share of the private passenger auto industry to 13.54 precent. This shows that Progressive is definitely posing a threat to GEICO’s position and that it has the potential to overtake if trends continue in their current directions.
Progressive has been spending heavily on its focus for growth in auto insurance premiums and policies.
Last year, the company reported spending over $3.27 billion on policy acquisitions. This was an increase of $250 million over the amount it had spent on this purpose in 2019. Moreover, the insurer spent $5.57 billion on other underwriting expenses last year, which was an almost $595 billion increase over its spending in 2019.
Its ad spending last year was almost $2.18 billion. In 2019, the company spent a much lower $1.84 billion on ads.
“Progressive’s other underwriting expenses, which excludes the policyholder credits, increased 12% in 2020 and 19% in 2019, in part reflecting increased advertising spend in both years,” read Progressive’s annual report. “On a year-over-year basis, our advertising expenditures increased 18% and 29% in 2020 and 2019, respectively. We will continue to invest in advertising as long as we generate sales at a cost below the maximum amount we are willing to spend to acquire a new customer.”
While other insurers such as Allstate (fourth place) have been making moves to improve their rank for auto insurance premiums, Progressive remains the stand-out over the last year. If the trend continues, it could change its market share position in the not-too-distant future.