Anyone regularly parked in front of a television might reasonably guess two things:
- That Geico is the biggest car insurance company in the United States.
- And that car insurance companies will not rest until Flo, the Gecko and Mayhem have their own sitcoms.
Only one of those things is true.
Geico has outspent all other auto insurers on advertising for years -- at least part of the reason for the news yesterday that Geico had, for the first time ever, surpassed Allstate in total auto insurance premiums sold the previous fiscal quarter.
Yet that would leave Geico only the country’s second-largest insurer.
No. 1 honors still go to State Farm, roughly three times the size of Geico. Last year, State Farm spent $778 million on ads -- about 1.6 percent of its total premiums, according to analysts at SNL Financial, which compared major insurers’ spending from 2010 to 2012 to see which devote the most dollars to ads.
Contrast that with the money spent by Geico, which lavished more than $1.1 billion on advertising in 2012, about 6.7 percent of its total premiums.
Which big insurer spends the least? USAA, spending just 0.84 percent of its premiums on ads. (The industry average was 2.3 percent.)
The shifting sands
The big differences in spending on ads underline the shift toward online car insurance shopping.
Companies such as Geico that do the majority of their business online, rather than through storefronts and agents, spent proportionately more on ads. Progressive, the No. 4 insurer, spends 3.6 percent of its premiums on ads, about the same as Allstate, which bought Esurance in 2011 to improve its online standing.
And if it feels like those companies are getting more aggressive, it’s because they are.
Geico spends 35 percent more on ads than any other insurance company, SNL found, and its spending has risen 24 percent since 2010, SNL found. (If you have trouble keeping track of the many different Geico campaigns, Wikipedia has this handy page.)
Another company ramping up ad spending in a big way was Liberty Mutual, up 18 percent in 2012, which is why you might be humming “Only Human” more than you’d like. Allstate/Esurance was up 15 percent.
You are also seeing less Flo. Progressive actually cut its ad spending a bit last year.