According to GlobalData, Progressive Corporation has overtaken State Farm to become the largest motor insurer in the US.
The company’s growth was largely attributed to its expanding for-hire transportation business, says GlobalData, alongside higher advertising campaigns and its affiliation with a larger number of insurance agencies.
As shown in the chart below, provided by GlobalData’s Insurance Intelligence Centre, Progressive’s market share in the US motor insurance market has increased from 13.1% in 2020 to 14.0% in 2021, while State Farm’s market share declined from 15.9% in 2017 to 13.9% in 2021.
With this change, GlobalData suggests that Progressive has become the leading motor insurer both in the US and globally, noting that it expects the trend to continue in 2023.
Meanwhile, Progressive’s motor insurance direct written premiums grew by 14.1% in 2021 compared to the 3.5% growth of State Farm.
The growth of Progressive’s motor insurance business was driven by its commercial motor business, which grew by 50.2% while it’s personal motor business grew by 8.1%, says GlobalData.
Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, commented, “Progressive expanded its commercial motor business by acquiring Protective Insurance Corporation in 2021, which helped it to add a larger fleet and additional product lines.
“In terms of organic growth, the company’s policies in force increased 6% in 2021, adding 1.3 million new personal lines policies.”
GlobalData also suggests that Progressive has better profitability compared to State Farm, citing Progressive’s motor insurance loss ratio, which stood at 67.0% in 2021 compared to 72.2% for State Farm.
Sahoo added, “Progressive is expected to maintain its leading position in the US motor insurance market, which is expected to grow at a compound annual growth rate of 3.9% during 2021-26.
“However, profitability of the industry could be a challenge over the next couple of years due to the high inflation, global automobile chip shortage, and an ongoing recession.”