Progressive's advertising expenditure hits record high in 2024

The four largest personal lines property and casualty insurers in the US increased their advertising expenditure in 2024. This shift comes after consecutive years of cutting advertising expenses to partly offset the effects of rising costs associated with elevated claims in 2022 and loss-cost inflation in 2023.

The Progressive Corp.'s advertising spending hit a record high of nearly $3.5 billion in 2024, up 186.8% from the $1.22 billion it spent in 2023, according to an analysis of regulatory data by S&P Global Market Intelligence.

At Progressive's fourth quarter earnings call CEO Susan Griffith mentioned an uptick in advertising expenditures during the second half of the year. She said this was designed to take advantage of the opportunity to increase its market share, as competitors did not adjust their rates as rapidly as Progressive did. The insurer expects to maintain its ad spending into 2025 and will "react really quickly" to its targeted profitability goals and competitor moves.

This increase in advertising spend led to significant growth, especially within Progressive's personal lines business. The insurer stated within its most recent Form 10-K that this growth was mainly due to an increase in new personal auto applications generated from greater advertising expenses; the lifting of non-rate actions in its personal auto business placed in 2023; a 3% increase in aggregate in its personal auto rates; and collaboration with its independent agents to leverage its agent compensation program to reward writing profitable business.

As of Dec. 31, 2024, Progressive had nearly 23.8 million private auto policies-in-force (PIF), a 21.8% increase from 2023 with a roughly 19.5 million policy count. Meanwhile, its homeowners policy count rose 13.6% to roughly 3.5 million.

– Read more about Progressive's growth in private auto. – Read more about Progressive's performance in 2024.

Allstate, GEICO's personal auto PIF decline

The Allstate Corp. was the second-largest advertising spender among US P&C insurers in 2024 with $1.87 billion, a 187.6% increase from 2023 when advertising expenses amounted to roughly $651 million.

While not directly correlated to advertising spending, the insurer's private auto PIF dropped by 1.4% in 2024. In the company's fourth quarter earnings call, Allstate executive Mario Rizzo confirmed its auto policies are declining but said that Allstate is "well positioned to lean into growth". The increase in advertising investment along with the removal of underwriting restrictions; improved auto insurance policy renewal rates; the acceleration of growth across all distribution channels; and expansion to other US states of its "sophisticated pricing" offerings such as telematics are expected to help the company grow in that space in 2025.

Meanwhile, Allstate saw growth in PIF in its homeowners line of business. At the end of 2024, PIF within its homeowners business grew 2.4% to about 7.5 million.

Berkshire Hathaway Inc.'s Geico Corp. increased its year-over-year advertising expenses by 67%. GEICO logged nearly $1.4 billion in total advertising expenditure in 2024, roughly $561million more than it spent in the previous year. While the company experienced a small year-over-year decrease of 0.5% within its private auto PIF, this is the third consecutive year since 2022 that GEICO saw a decline in its policy count. In Berkshire's most recent Form 10-K, the insurer said that "the rate of decline in policies-in-force slowed in the first half of 2024, with growth experienced in the second half of the year".

State Farm spends the least

State Farm Mutual Automobile Insurance Co. spent $1.11 billion on advertising, the least among the four largest personal writers. The company increased its advertising spending by only 11.9% from nearly $992 million in 2023.

State Farm wrote almost $109 billion in direct premiums which represents a 16.2% growth, the second-largest year-over-year growth in direct premiums written among the four next to Progressive with 21%.

Allstate and GEICO grew their direct premiums written by 11.6% and 7.9%, respectively.