GEICO (geico.com), one of the leading auto insurance companies in the United States. GEICO operates nationally and primary marketing goals for auto insurance (in order of priority) are to increase the number of leads and strengthen the customer retention rate. The auto insurance industry is price-centric and highly competitive. GEICO’s key competitors are Progressive, State Farm, Farmers and Allstate. GEICO’s competitive position in the industry is dependent on a range of factors including premium charges, geographic strength, types of products offered and claims service. Have developed a research presentation to achieve the following objectives: • Provide an overview of the auto insurance market in the US, focusing on the brands mentioned above • Auto insurance industry customer trends (current) • SWOT analysis of GEICO’s auto insurance business, and marketing efforts • Current marketing efforts of GEICO and key competitors (mentioned above) .

1. Auto Insurance in US
- Abhijit Sathe

2. Overview
Why Are Auto Insurance Rates Continuing to Climb?
 One of the main reasons insurers are likely to raise car insurance rates is to adjust for consistent
increased losses. These are usually attributed to an increase in the frequency or cost of car
insurance claims.
 Heightened losses in recent years have led to a 7.2% rate hike across the 10 largest auto insurers
in 2018. This rate increase followed a year in which eight of the 10 largest auto insurers reported a
negative underwriting profit. In the table below, a combined loss ratio of more than 100%
indicates the company incurred more in losses and expenses than it earned in premiums.

3. Auto Insurance rates by top insurance
companies
0
50
100
150
200
GEICO State Farm All State Farmers Progressive
29.6 41.82
21.43 10.36 22.79
99
117.1
100.1 110.6 95.7
8.82
8.07
4.79 8.98 2.08
Chart Title
Written Premiums in $ Loss ratio 2017 (%) Rate increase in 2018 (%)

4. Across the 10 largest insurance companies, this trend has been linked to increased car insurance
rates in recent years. From 2015 to 2018, these companies posted a year-over-year average
underwriting profit margin of -3.8% and average rate increases of 5.1%.
2.7
4.3
6.3
7.2
-2
-4.4
-6.8
-2.1
-9
-6
-3
0
3
6
9
2015 2016 2017 2018
Profit Margin and Rate Increases: 10 Largest Auto Insurance Companies
Rate Increases(%) Underwriting Profit Margin (%)

5. Market Share in the US
The companies holding the largest market share in the Automobile Insurance industry include State Farm,
Berkshire Hathaway Inc., Progressive Corp. and The Allstate Corporation.

6. As the chart below shows, just three of the Top 10 private passenger auto insurers, GEICO,
Progressive and USAA, gained market share in 2018 . State Farm, Allstate, Farmers, Nationwide,
Travelers and American Family, have seen declines in their market share.

7. How is the Auto Industry Trending in the US?
Total Revenue in 2019
$285bn
No. of Bussinesses
8,701
Annual Growth
2015-2019
3.3%
Industry Employment
279,001

8. The auto insurance trends and customer report
 Digital transformation is reshaping the insurance industry at a time when consumers are expecting
more from products and services.
 Qualtrics surveyed 800 US auto and renters insurance customers to understand what they expect
and identify the emerging trends that will shape the insurance industry experience.
 Study Released Summer 2018

9. QUESTION
Aside from friends and family, the top sources for learning about auto-insurance providers are

10. How many auto-insurance providers made your “short list” being considered?

11. Why did (didn’t) you consult an agent while shopping for an auto-insurance provider?
The next time you shop for auto-insurance, do you plan to use an agent?
of consumers will
Consult with an
insurance agent while
shopping for new auto
policy
of those who did
use an agent , plan
to use an agent
again
of those who
didn’t use an
agent , plan to use
an agent next
time

12. How do you think an auto-insurance provider decides how expensive your rate
is?

13. Which part of shopping for auto-insurance was the most confusing?

14. What would have made your auto-insurance shopping easier?

15. Which best describes you regarding auto-insurance?
of auto insurance
customers plan to
increase their current
coverage this year
of auto insurance
customers plan to keep
their current coverage
about the same this
year
of auto insurance
customers plan to
decrease their
current coverage
this year

16. Which do you think is more important to your auto-insurance provider?

17. What could your auto-insurance provider do to provide a
better experience?

18. Which abilities would you most want from an auto-insurance
provider accessed online with your computer?

19. Which abilities would you most want from an auto-insurance mobile
app?

20. Which would you be most likely to do to reduce your auto-
insurance rate?

21. How interested would you be in purchasing a self-driving car?

22. Which do you think is most likely if you owned a self-driving
car?

23. If you were to consider using your car to earn money with a ride-sharing service
(like Uber or Lyft), how much of a concern would auto-insurance be in your
decision?

24. Geico SWOT Analysis
1.Strong dealer community
2. Successful track record of new records
3. Strong distribution network
4. High level of customer satisfaction
5. Strong Free Cash Flow
1. profitability ratio and Net Contribution % is
low
2. High attrition rate in work force
3. There are gaps in the product range sold
4. Limited success outside core business
1. New environmental policies
2. New customers from online channel.
3. Lower inflation rate.
1. Intense competition
2.No regular supply of innovative products.
3. New technologies developed by the competitor
Strength's Weakness

25. Competitor Analysis Report

26. GEICO's rates were fairly high for higher-risk drivers. The quotes that GEICO provided for the
profiles that had an at-fault accident within the past five years were on average 13% higher
than the mean for those profiles.

27. Marketing Efforts
Social

28. Display Advertising

29. GEICO Online Tools
 GEICO's industry-leading online tools let customers buy and manage insurance policies themselves,
without having to go through an insurance agent. These tools are easy to use—"So Easy a Caveman Can
Do It"—and are a great perk of having a GEICO insurance policy.
 GEICO Express Services: This is an online service that requires no login and lets policyholders quickly
make payments, get insurance ID cards and access policy documents.
 GEICO Mobile app: With the GEICO Mobile app, you can shop for insurance, pay bills, access your
insurance ID cards and even file claims right from your phone. You also have the option to chat online
with GEICO's newer virtual assistant, Kate.