GEICO reports largest cutback in ad spend for 2022
The Berkshire Hathaway subsidiary reportedly spent $1.28 billion on advertising in 2022, roughly $800 million less than the prior year, as its parent company saw insurance underwriting results that were impacted by natural catastrophes and increases in private passenger auto claims.
In 2022, Berkshire Hathaway’s insurance underwriting recorded an after-tax loss of $90 million, compared to after-tax earnings of $728 million and $657 million in 2021 and 2020, respectively.
GEICO’s cutback allowed Progressive to become the biggest advertising spender in 2022, S&P Global said, with its property and casualty subsidiaries logging $1.73 billion in total ad expenses.
This 7.6% decline from the previous $1.87 billion ad spend in 2021 was part of Progressive’s efforts to meet its internal profitability target of a 96% combined ratio, according to CEO Susan Griffith, who added that the company will continue to evaluate its media spending and use it efficiently in 2023.
Allstate’s ad spend lowest among big four
Allstate’s total ad spend fell below $1 billion in 2022 at roughly $950 million, 26.9% down from the previous year.
While not a direct correlation to advertising spending, the insurer did experience a small year-over-year increase within its homeowners and private auto lines of business in 2022, according to S&P Global.
A note within its most recent Form 10-K also revealed that the number of Allstate’s in-force policies may fall as it tries to improve profitability through rate actions, as well as a temporary reduction in its ad spend.
Meanwhile, State Farm and its affiliates reportedly spent about $1.01 billion on advertising in 2022, S&P Global said, down from $1.07 billion in 2021 and its five-year peak of $1.21 billion in 2019.
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