How Much Are Car Insurance Companies Spending on Ads?

While there’s no publicly available information on how much insurance companies spend on car insurance ads specifically, we did find data on their total ad spend.

Of the companies with the largest market share for private passenger auto insurance, listed above, the average advertising spend in 2022 was just under $971 million, with total spending over $5.8 billion. GEICO spent the most on ads, a total of $1.5 billion, while USAA spent the least, only $434 million.¹

As far as the most-advertised brands across all industries in the U.S., GEICO came in third, trailing behind Amazon, which spent $6.1 billion on ads in 2022, and Walmart, which spent $2.2 billion.

Is advertising effective? The short answer is yes. Comparing 2022 revenue with advertising spend in the U.S., GEICO saw the largest return-on-investment (ROI), earning $1.22 for every $1 spent on advertising. For some, like Progressive, they weren’t as profitable, with lifts of only four cents on the dollar.²

Keep in mind that this revenue was for all property/casualty insurance, which includes car insurance along with homeowners, personal liability, watercraft, and inland marine insurance.

It’s pretty mind-boggling how expensive commercials, print ads, billboards, and digital ads are. While a 2023 report from eMarketer did not separate insurance from other financial services, it shows that financial services spend 11 percent of the total digital ad spending across all industries, the second-highest percentage after retail and consumer packaged goods.

Based on an estimated $73.55 billion spent on digital advertising in the U.S., the financial services industry spent about $8 billion in 2023.

Looking at the personal property and casualty insurers in the U.S., which includes auto insurance, we can see that four top brands reduced their advertising spends by an average of nearly a quarter.

The biggest drop was GEICO, which spent $440 million less on advertising in 2023 compared to 2022. According to S&P Global, the reason for this reduced spend is to offset the costs of inflation as well as a reduction of in-force policies. Allstate saw a similar reduction in policies, while Progressive saw growth and was the only company to spend over a billion dollars in advertising in 2023, still a nearly 30 percent decrease from 2022.⁴

At this point, you probably recognize the car insurance mascots as much as you do an aunt or uncle.

Jake from State Farm, Flo from Progressive, the ubiquitous GEICO gecko — these characters introduce us to brands that would otherwise seem very similar to each other, offering standard personal auto insurance policies for liability coverage and beyond.

But before there was Flo, car insurance commercials weren’t so funny. They were serious cautionary tales, testimonials from satisfied customers, and the like. Insurance was considered a solemn business, as it deals with the effects of at-fault accidents, which can be costly and dangerous.

Now, insurance companies lean into the humor that started with the GEICO gecko in 1999. An advertising agency called The Martin Agency invented the renowned reptile to reinforce GEICO’s name, which many people do not know is an acronym for Government Employees Insurance Company. Since the success of the gecko, the company has debuted the cavemen (which turned into a short-lived sitcom) and the infamous rhetorical questions.

But can comedy sell something as important and practical as car insurance? The answer is yes. Pre-gecko GEICO had only 2 percent of the market share, making it the eighth most popular car insurance provider in the U.S. But as of 2023, GEICO comes in at number three behind State Farm and Progressive, with a total 12 percent of the market share.⁵ Naturally, other companies have followed suit with characters such as Progressive’s Flo and Allstate’s Mayhem.

Another case study is Progressive. In 2007, Progressive had little brand recognition, to the point where people often confused it with Progresso Soup. But after working with the Arnold Worldwide ad agency, it debuted the superstore idea with iconic cashier Flo in 2008. The actress who played Flo, Stephanie Courtney, was a graduate of The Groundlings, a sketch and improvisational comedy troupe and school based in Los Angeles. The commercial soon became a recurring ad sitcom, making Flo a household name. Who says improv can’t be lucrative?

Like the GEICO gecko, Progressive’s funny ads had a huge effect on its business. In 2007, the year before Flo appeared on her first commercial, Progressive’s total revenue was $14.7 billion. But by 2023, Progressive reported total revenues of $62.1 billion, an increase of 25 percent year-over-year and more than three times its 2007 revenue.⁶ Today, Progressive makes up 15 percent of the total private passenger auto market, second only to State Farm which makes up 18 percent.

There’s a reason companies spend billions on car insurance advertising each year: it works. But that doesn’t mean you should get car insurance based on which ads make you laugh the most. It’s important to do your research on car insurance and talk to an insurance agent or broker before deciding on car insurance coverage. Consider not only a company’s advertising campaigns, but also its customer service ratings and whether it offers cheap car insurance. To save money on car insurance, you need to look past the social media, digital, and traditional ads.

For this report on car insurance advertising, we compiled third-party data from these sources:

• Advertising Age
• eMarketer
• S&P Global
• National Associate of Insurance Commissioners
• Progressive
• Berkshire Hathaway
• State Farm
• Liberty Mutual
• Allstate
• USAA