Weiss Figures Show Auto Insurance Industry Dominated by Four Companies

Auto insurance is something everyone needs. Period. Even if your car is paid off and you no longer want full coverage, you’re still required to have liability protection. It’s mandatory across the country, though minimum limits vary depending on where you live.

Judging from all the ads on TV, you might think that there are a ton of choices out there. And in one regard you would be correct. Over 1,200 companies wrote auto insurance policies covering private and commercial vehicles in 2016. Their direct premiums, or new business, totaled $153.5 billion, having increased 17% since 2013.

But Weiss figures show that the industry is dominated by subsidiary, operating companies that are ultimately controlled by four parent corporations. Those top 10 subs wrote $48.4 billion in new business last year, representing 31.5% of the entire auto insurance industry.

So who are these firms? Let’s take a look.

Below are the top ten auto insurance units by premium income in 2016. You will notice a handful of names in the left-hand column, mainly familiar from television ads with catchy phrases and funny skits. Then in the middle, you’ll also see that only four parent companies ultimately stand behind these ten industry giants.

2016 Largest Auto Insurers by Most Dollars in New Policies

State Farm Automobile Ins Co. isn’t publicly traded, and it takes the first spot among the biggest players. It had $21.5 billion in new business written last year, about 44.5% of the total for our top ten list.

Berkshire Hathaway Inc. (BRKA, Investment rating “C”) comes in second, with four individual GEICO companies under its belt and overall market share of 28.7%. The company is known for having its hand in a wide array of businesses.

Allstate Corp. (ALL, Investment rating “A-”) takes the third spot with 17.6% market share, followed by United Services Automobile Association (not traded publicly), with a 9.2% share. More specifically, Allstate has three subsidiaries on the list and United Services Automobile Association has two.

The bottom line is that auto insurance, just like banking and other industries, is dominated by a handful of large players. They may be perfectly suitable for you. But rather than just default to their products based on an advertisement you may have seen, be sure to check out our very comprehensive lists of Weiss Recommended Auto Insurers by State.

Select your state from the drop down box, pick “Auto Insurance” under the “Type”, and click “View” to see all recommended auto insurers (rated B+ or higher) in your state. As always, you have to balance pricing with other issues, such as customer service, so do your research and choose wisely.

Think Safety,

Gavin Magor

Insurance Insights Edition, By Gavin Magor, Senior Financial Analyst Gavin has more than 30 years of international experience in credit-risk management, commercial lending and insurance, banking and stock analysis and holds an MBA. Gavin oversees the Weiss ratings process, developing the methodology for Weiss’ Sovereign Debt and Global Bank Ratings. Gavin has appeared on both radio and television, including ABC and NBC as an expert in insurance, bank and stock ratings and has been quoted by CNBC, The New York Times, Los Angeles Times, and Reuters as well as several regional newspapers and trade media.