Research
Insurance Companies Slashed Ad Spending in 2023. Here’s Why Your Rates Are Still High
Insurance commercials are everywhere, and compared to other financial products, the ads are especially catchy. Even if you don’t have a policy with Allstate, you’re probably familiar with Mayhem and his cartoonish crises. Jake from State Farm and Flo from Progressive are even common Halloween costumes.
It’s hard to get through a half-hour of TV without hearing a single plug for car or home insurance (or both!). All those ads cost money — big money. In 2023 alone, the four biggest insurance companies in the U.S. paid a total of $3.7 billion to get their names on your screens.
Which begs the question — is that why insurance is so expensive right now?
The short answer: no, your premiums aren’t being artificially inflated by Flo’s salary. But it’s a little more complicated than that. To help untangle the relationship between insurers’ advertising budgets and rising prices, Bankrate’s insurance editorial team looked into the marketing budgets of four major U.S. insurance companies — Allstate, Geico, Progressive and State Farm — and spoke to experts about the role of advertising in the industry.
How much do insurance companies spend on advertising?
Let’s start with a big question: How much do all of these TV ads really cost? According to data from S&P Global Market Intelligence, the total ad spend of the four largest U.S. property and casualty insurance companies by market share came to around $1 billion each in 2023, with Progressive spending the most out of any insurer. [MORE](https://www.bankrate.com/insurance/car/insurance-advertising/#how-much-do-insurance-companies-spend-on-advertising(
2024 U.S. Auto Claims Satisfaction Study | J.D. Power
Auto insurers have been fighting two major headwinds ever since the pandemic: rising costs and longer repair cycle times. This year, according to the J.D. Power 2024 U.S. Auto Claims Satisfaction Study,SM released today, some relief is in sight for one of those trends. The study shows that the average repair cycle time for claims filed later in the fielding period is 18.9 days, which is down 5.0 days from 23.9 days in the early fielding period. While that may offer some relief to insurers and their customers, the cost side of the equation has gone in the opposite direction, with the average repair cost rising 26% in the past two years. Premiums have followed suit, rising 15% during the past year.
“The claims process is the moment of truth for auto insurance customers, so when they experience rate increases and then have a claim with longer-than-expected repair times and other inconveniences, their overall trust in the brand is greatly diminished,” said Mark Garrett, director of global insurance intelligence at J.D. Power. “In fact, 80% of auto insurance customers who have poor claims experiences have already left or say they plan to leave that carrier. That makes this year’s significant improvement in repair cycle times very good news for insurers and their customers. However, premium increases have created a new challenge for insurers as trust is eroding and affecting the way customers view their claims. There are still many challenges the industry needs to navigate to maintain customer loyalty.”
News
California Insurance Crisis Is Killing Home Sales - Newsweek
Home sales in California are slumping as homeowners struggle to find insurance at a time when many private companies are cutting coverage, refusing to renew policies or withdrawing from the state entirely.
According to a new report from the California Association of Realtors (CAR), 13 percent of realtors in the Golden State had a sales transaction canceled this year because insurance was unavailable or unaffordable. That's double the 6.9 percent reported by California realtors a year earlier.
As California faces the growing risk of more frequent and more extreme natural disasters, including wildfires, policy options have become drastically more scarce and premiums more expensive.
Already struggling to find an affordable home in the expensive California housing market, which has faced 15 consecutive months of year-on-year hikes since July 2023, as reported by Redfin, buyers might be driven off purchasing a property if unavailable to find accessible insurance. In this situation, insurance might weigh more than the price of a home in determining whether a buyer is actually able to afford the property.
Commentary/Opinion
Dashcams for All | Insurance Thought Leadership
When my older daughter was perhaps three years old, I stopped behind a car at a red light in the Bay Area. From her car seat in the back, she called out, "Come on, bozo, move it."
Oops. Perhaps I kibitzed even more about other drivers than I thought — and I knew I did it a lot. Offering constructive advice to my fellow drivers is one of the many habits I inherited from my father.
Fast forward to maybe 15 years ago, when I was spending lots of time on freeways driving her and her sister to soccer games and other events. I began fantasizing (out loud, no doubt) about having a camera in my windshield to track the many transgressions of the drivers around me — in particular, the idiots who wove in and out as they raced each other in traffic, as though we were all just in a video game. Wouldn't it be great to capture the video, including the license plates, and forward it to police?
I wanted a camera in the back, too, to catch those who tailgated, sometimes within a few feet, to try to bully me out of the left lane even though there was a car just ahead of me in my lane. (I assure you, I did not drive slowly in my Mercedes convertible.)
Well, based on two recent viral videos, I think it's time to declare victory. We can all have cameras in our windshields and get at least some coverage in the back, at minimal cost.
Doing so would be a major step forward for insurers — reducing fraud, simplifying the adjudication of blame after an accident, and reducing accidents by even getting some of the idiots to stop tailgating.
Paul Carroll, editor-in-chief, Insurance Thought Leadership
InsurTech/M&A/Finance💰/Collaboration
Global InsurTech market rebounded in Q3 as average deal value tripled - FinTech Global
Key InsurTech investment stats in Q3 2024:
Global InsurTech market rebounded in Q3 as funding increased by 55% YoY
Average deal value tripled in Q3 as investors focus on higher value investments
Sedgwick, a global leader in claims management, secured the largest deal for the quarter with a funding round of $1bn In Q3 2024, the global InsurTech sector saw mixed results in terms of deal activity and funding. Only 53 deals were recorded during the third quarter, marking a 49% decline compared to the 104 deals completed in Q3 2023.
Despite the drop in deal numbers, InsurTech companies raised $2.38bn in Q3 2024, representing a 55% increase from the $1.53bn raised in the same quarter last year.
If this trend continues, the projected total for deal activity in 2024 would be around 208 deals, a notable 33% decrease from the 312 deals completed in 2023.
The average deal value in Q3 2024 stood at $44.8m, which is triple the size of the average deal value in Q3 2023 which was $14.7m.
However, this funding figure is skewed a $1bn funding round raised by Sedgwick, a global leader in claims management, loss adjusting, and tech-enabled business solutions.
Removing this outlier, third quarter funding would be approximately $1.38bn, resulting in an average deal size of $26m, which, while still higher, reflects a less extreme 77% increase from Q3 2023’s.
HOMEE Raises $12 Million in Series C Funding Round
HOMEE, the only AI-driven direct repair network for the Property and Casualty insurance industry, today announced it has closed a Series C Financing led by W.R. Berkley Corporation. The financing, which includes new investors, The Institutes, the leading provider of risk management and training for the insurance industry, and Sure, Inc. the fastest growing insuretech building the technology rails for digital insurance, brings the total capital raised by the Company to more than $75 million. The new investors join existing strategic investors State Farm, Liberty Mutual, The Hartford and Desjardins. The additional capital will accelerate software development for the industry’s next-generation AI Smart-Claim management platform. The new software is expected to enable dramatic increases in scale by seamlessly connecting carriers directly to the Company’s highly vetted direct repair network throughout the US.
“We’re thrilled to have W.R. Berkley Corporation as both an investor and strategic partner. They will bring significant value to our shareholders, and we’re excited to have Michael Nannizzi join our Board of Directors” ] The Company also announced its fifth-consecutive record financial quarter with revenue growth of 15% and claim assignment growth of 14% over the prior quarter. Throughout 2024 the Company has expanded its nationwide repair coverage by over 300%, now covering more than 7 million homes in 38 states. The Company has also experienced a 250% increase in the number of claims assigned to its nationwide direct repair network since the first quarter of 2024.
HOMEE is handling increased claims volumes from carriers related to the two recent hurricanes, Helene and Milton. Larry Nettles, who leads the Company’s service professionals network, stated, “Despite the challenges posed by two consecutive historic storms, our ability to handle property claims remains strong. Aside from those cases where roads and power have restricted access, we continue to match service professionals to claims within minutes and rapidly deploy a professional to the commercial property or residence. Powered by our technology, HOMEE’s unparalleled network stands ready to help our customers and partners bounce back from these unprecedented events.”
DoorLoop Raises $100 Million Series B Funding Round Led by JMI Equity
Award-Winning All-in-one Property Management Software Company Partners with JMI Equity to Accelerate Product Innovation and Team Expansion
DoorLoop (the "Company"), the market leading all-in-one property management software company, today announced a $100 million Series B funding round led by JMI Equity, a growth equity firm focused on investing in leading software companies. The investment will empower the Company to build upon its product offerings and deepen its leadership bench as it continues to stand out as an industry-leading centralized platform for property management.
DoorLoop will continue to focus on delivering best-in-class products and value to customers. In the near-term, DoorLoop plans to accelerate hiring and investment across its US and Israel offices to drive customer centric product innovation.
Data Privacy
Government Warns Foreign Tech In Cars Is Vulnerable To Hackers, Proposes Ban
Imagine driving a car that knows your daily routine, can monitor nearby traffic and even call for help in an emergency. Sounds great, right? But what if that same car could also reveal your location to someone else — or be remotely controlled by a foreign hacker?*
The U.S. government is now proposing a ban on automotive software and hardware from China and Russia, focusing on connected vehicle components that could pose both security risks and privacy threats to American drivers.
As the Department of Commerce explains, this proposed rule targets foreign-made Vehicle Connectivity Systems and Automated Driving Systems — the very technologies that enable our cars to function as “smart devices” on wheels.
Legal System Abuse/Social Inflation
Americans See Link Between Attorney Involvement in Claims and Higher Auto Insurance Costs: IRC Report
Advertising by billboard attorneys to encourage consumers to hire a lawyer to settle an auto accident claim leads to higher costs of auto insurance.
Widespread advertising by billboard attorneys to encourage consumers to hire a lawyer to settle an auto accident claim leads to higher costs of auto insurance across the U.S., according to the majority of respondents in a new report from the Insurance Research Council (IRC), an affiliate of The Institutes.
“Most respondents believe that attorney advertising increases auto insurance costs by encouraging more legal involvement, which leads to higher claim settlements and legal expenses." - Dale Porfilio, President, Insurance Research Council
The IRC report, Public Opinions on Attorney Involvement in Claims, examined consumer opinions on attorney advertising and its perceived impact on the cost of auto insurance and legal behavior.
The national survey expanded on findings from past IRC studies on this issue. The 2024 survey showed 60% of respondents indicated attorney advertising increases the number of auto claims (up from 55% in the 2021 IRC survey. Additionally, 52% of respondents feel that attorney advertising increases the cost of their auto insurance (up from 45% in 2021).
“Attorney advertising is a significant part of the legal landscape, particularly in auto injury insurance claims,” said Dale Porfilio, FCAS, MAAA, president of IRC and chief insurance officer at the Insurance Information Institute (Triple-I).
Recommended Events
InsurTech Hartford Symposium 2025 | April 29th & 30th, 2025 | Connecticut Convention Center
We're Back! – Early Bird tickets are now on sale!!
The InsurTech Hartford Symposium is a highly immersive conference experience that brings together great minds and world-class leaders offering the perfect ecosystem to Learn, Connect, and Unwind
The InsurTech Hartford Symposium is returning to Downtown Hartford, the heart of insurance innovation, bringing together the brightest minds in the industry. Join us for an unforgettable event where you'll connect with industry leaders, explore the latest innovations, and discover new opportunities.
Date: April 29th & 30th, 2025 Location: Connecticut Convention Center
Agenda Highlights
Here’s a peek into some of the sessions • Enhancing Customer Experience: Leveraging Digital Tools for Engagement and Retention • The Future of Distribution Channels: Reaching Modern Consumers through Digital Platforms • AI in Underwriting: How AI is Transforming Risk Assessment • Cyber Resilience: Strengthening Security Posture • To see the full list, visit our website.
💡Take advantage of Early Bird pricing by registering before November 22. GET TICKETS
2025 PREDICTIONS
2025 Predictions: Tech and UBI Growth, 5 Carriers to Exit Auto Market
It’s expected that in 2025, rising claims costs will continue to push insurance rates higher, frustrating customers and forcing insurers to customize products, according to a new report by global market research company Forrester.
Embedded insurance will grow by at least 30 percent, predominantly in personal lines, the market researcher said, with 32 percent of global business and technology professionals at insurance firms planning to invest more in embedded finance capabilities in 2025.
By integrating insurance products into platforms with large customer bases, embedded channels are gaining dominance and providing a gateway to new customer segments by “making products easier to understand and purchase while reducing the coverage gaps that currently leave consumers and small businesses underinsured.”)
2024 In Review
InsurTech Leaders Predict Major Shifts in Insurance as AI, Cloud, and Modernization Take Center Stage - Insurance Journal TV
Experts at ITCVegas 2024 highlight AI, cloud adoption, and digital modernization as top priorities for reshaping the insurance industry over the next five years. Allen Laman of Carrier Management talks with Charles Mattson, Senior Account Executive of Creatio, and Rana Ganguli, Global Vice President, Financial Services at Newgen Software about what they're seeing in the industry.
Interested in attending or speaking at Carrier Management's virtual InsurTech Summit in 2025? Register now