GEICO reported the largest cut in ad spending for 2022

The Berkshire Hathaway subsidiary reportedly spent $1.28 billion on advertising in 2022, about $800 million less than a year earlier, as the parent company saw insurance underwriting results hit by natural disasters and increases in private passenger car claims.

In 2022, Berkshire Hathaway’s insurance underwriting posted an after-tax loss of $90 million, compared to after-tax profits of $728 million and $657 million in 2021 and 2020, respectively.

GEICO’s downsizing allowed Progressive to become the largest spender on advertising in 2022, S&P Global said, with its property and casualty subsidiaries reporting $1.73 billion in total advertising expenditures.

That 7.6% decline from its previous ad spend of $1.87 billion in 2021 was part of Progressive’s efforts to achieve its combined internal profitability target of 96%, according to CEO Susan Griffiths, who added that the company will continue to evaluate its media spending and use. efficiently in 2023.

Allstate advertising spends the least among the Big Four

Allstate’s total ad spending fell below $1 billion in 2022 by about $950 million, down 26.9% from the previous year.

Although there is no direct correlation between an insurer and advertising spending, the insurer did see a small year-over-year increase in homeowners and private auto business lines in 2022, according to S&P Global.

A note in the most recent Form 10-K revealed that the number of Allstate policies in place may decrease as it tries to improve profitability through price actions, as well as a temporary reduction in its advertising spend.

Meanwhile, State Farm and its affiliates reported spending about $1.01 billion on advertising in 2022, S&P Global said, down from $1.07 billion in 2021 and a five-year peak of $1.21 billion in 2019.

What do you think of insurance companies in reducing their advertising expenditures? Feel free to comment below.

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