Big Auto Insurers See Decline in Market Share

Over the past decade, the largest insurers in the country have been growing their combined market share so that today over half of all private passenger auto insurance in the United States is handled by just five companies, and the top 15 companies encompass more than 75 percent of the entire market.

In the year 2000, that same 70 percent of the business, now held by just 10 insurers, was served by nearly 19 different insurers competing for that same share of the market. Those top 19 made up 71.1 percent of the market.

However, the latest data from the National Association of Insurance Commissioners (NAIC), which ranks insurer market share based on total written premiums for the year, shows that the rapid growth of the past decade may be starting to slow.

According to the final 2012 NAIC figures, the top five private passenger auto insurers in 2012 controlled 52.09 percent of the market, down 1.22 points from 53.31 percent in 2011. Likewise, the combined market share of the top ten companies also dropped in 2012, to 69.56 percent from 71.26 percent in 2011. The loss of market share was experienced by nearly every individual company in the top ten. Only GEICO and Zurich saw their share increase from 2011 to 2012.

The combined market share of the top 15 insurers also dropped over the past year, from 77.73 to 75.78 in 2012.

Over the past decade, the two largest insurers, State Farm and Allstate, have steadily controlled approximately 30 percent of the market (down to 28.37 in 2012) while the landscape just below them has changed dramatically.

In 2000, Berkshire Hathaway (GEICO) and Progressive combined controlled just over nine percent of the market, holding the number four and five spots in the NAIC rankings. Since then, the share of the market they control has grown to where they now control 17.84 percent of the market with GEICO holding the number three spot followed closely by Progressive at number four.

Out of the top five insurers in 2012, Allstate is the only insurer to have lost some of its private passenger auto market share in the years since 2000, according to NAIC’s numbers. The biggest gainers have been GEICO (up 103.8%) and Progressive (up 75.7%).

Though not in the top five, Liberty Mutual has proven to be the largest relative gainer, more than doubling its market share (up 105.7%) since the year 2000.

Looking further down the list, to the top 15 and top 25 largest private passenger auto insurers, the top 15 insurers grew their market share by 8.98 points (13.4%) since 2000 while the market share of the top 25 insurers grew 6.78 points, or 8.9 percent, since 2000.

In the year 2000, the top 25 insurers competed for a combined 73.9 percent of the private passenger auto insurance market. Today, that share of the market is controlled by just 13 companies.

Rank Private Passenger Auto Groups

Market Share Percent

Sorted by 2012 Rank 2012 2011 2010 2009 2000
1 State Farm 18.37 19.57 18.68 18.42 17.90
2 Allstate 10.00 10.85 10.19 11.21 11.80
3 GEICO 9.58 9.54 8.51 7.69 4.70
4 Progressive 8.26 8.34 7.71 6.94 4.70
5 Zurich 5.88 5.01 5.97 6.28 5.80
6 USAA 4.83 4.83 4.36 4.63 3.40
7 Liberty Mutual 4.73 4.78 4.50 4.36 2.30
8 Nationwide 4.08 4.26 4.22 4.36 4.60
9 Travelers 1.94 2.19 2.11 1.87 2.00
10 American Family 1.89 1.89 1.94 2.18 2.10
Total Share Top 5 52.09 53.31 51.06 50.54 44.90
Total Share Top 10 69.56 71.26 68.19 67.94 59.30
Total Share Top 15 75.78 77.73 74.57 74.65 66.80
Total Share Top 25 83.28 84.91 81.98 82.56 76.50
Source: National Association of Insurance Commissioners 2013

by CollisionWeek: http://www.collisionweek.com/cw/news/2013/f0404-big.asp

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