What is it costing your auto insurance provider to advertise each year? SNL Financial set to find out. Geico Corp is the King of auto insurance advertising, data shows, with annual spending of close to $1 billion! This number is up 10 percent from spending in 2010, which shows that insurers are becoming increasingly more competitive for your dollars.
What Are Other Auto Insurers Spending?
State Farm Mutual Automobile Insurance Co. — the largest home and auto insurer in the U.S. — took second place in the advertising war. Geico spent 22 percent more than State Farm last year, but State Farm increased their ad spending by 29 percent — three times’ the rate of Geico’s ad spending increase. Allstate Corp was the third biggest spender at $745.3 million in 2011.
Do Auto Insurance Companies Have To Spend So Much?
Allstate Corp has felt the pain of cutting back during the recession. An internal presentation indicated they had been losing ground with consumer awareness due to reduced TV ad spending in the previous year. They also lost 30 percent of their typical call center volume due to reduced direct-mail solicitations. So, it’s no surprise they ramped up their efforts last year to keep pace with the big dogs.
Does Increased Auto Insurance Advertising Affect Premiums?
Insurance companies are in the business to make money, so you can be sure they are charging you more than enough to cover any accidents and fund their companies’ growth. Research indicates that there has not been a major churn in the industry, despite increased spending. Progressive and Geico are growing, but most insurers aren’t able to grab major market share. On the bright side, 25 percent of auto insurance customers shopped for a new policy last year — and 43 percent of them did end up switching providers. This is the highest switch rate since 2008.