State Farm has joined the ranks of property and casualty insurers to spend at least $1 billion on advertising in a year.
State Farm Mutual Automobile Insurance Co. and its affiliates spent roughly $1.21 billion on advertising in 2019, compared to $903 million in 2018, according to an analysis of regulatory data by S&P Global Market Intelligence. The almost 34% year-over-year increase in ad spending was the highest among the largest U.S. personal auto insurers.
While State Farm was pouring money into advertisements, its private auto direct premiums written fell year over year for the first time since 2007. The group reported private auto direct premiums written of $40.88 billion in 2019, a 2.6% decrease from the prior year. In aggregate, State Farm reported personal lines direct premiums written of $59.86 billion in 2019, down from $60.42 billion in 2018, a decrease of roughly 1%.
Progressive Corp. continues to rapidly increase the amount of money it puts into advertising, more than doubling its expenditures since 2016. The insurer spent $1.66 billion in advertising in 2019, up from $1.29 billion in 2018. The company spent just $688 million on ads in 2016.
Even with the increase in advertising spending, the insurer saw a slowdown in the growth of its private auto direct premiums. The yearly growth rate fell to 14.7% in 2019 compared to the almost 19% year-over-year growth it experienced in the prior year.
Berkshire Hathaway Inc.'s GEICO Corp. topped the list, spending almost $2 billion on advertising in 2019. The $1.94 billion GEICO pushed into ads was an 11.9% increase from the $1.73 billion in 2018. GEICO reported that yearly direct premiums written within its private auto business continues to increase, but the rate of growth dipped to single digits in 2019. It was the first time since 2012 that GEICO's year-over-year direct premiums written did not grow by double digits.