Geico Poised to Drive Past Allstate

Biggest-Spending Insurer Closes in on No. 2 Slot Behind State Farm

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Geico might soon cause a little of its own mayhem in the auto-insurance market.

The marketer -- which spends some $1 billion a year on gecko and pig-filled advertising -- is poised to surpass Allstate as the nation's second-largest auto insurance company, according to business data company SNL Financial.

Geico has already passed Allstate for the first-quarter period, writing $4.72 billion in auto direct premiums compared with $4.53 billion for Allstate, according to SNL, which noted in a report this month that it is the first time Geico has surged ahead of its rival in a single reporting period.

For the year, Allstate still leads -- but barely. The insurer, whose advertising includes the "Mayhem" campaign, kept the No. 2 spot in auto insurance for the 12-month period ended March 31 by a narrow margin, with $17.65 billion in premiums to Geico's $17.16 billion. The Chicago Tribune first reported the numbers.

State Farm remains the leader, with $8.43 billion in direct premiums in the first quarter.

SNL noted that Geico's business has more seasonality than Allstate's, meaning that the "Good Hands" company could regain its familiar second-place position in the second quarter. But in a separate report, SNL projected that "after years of consistent premium growth, Geico is in position to become the second-largest U.S. personal auto writer in 2013."

In an interview with Ad Age, Geico Chief Marketing Officer Ted Ward said the company is "a little shy" about talking about No. 2 until the annual tally is published. (And for that, the company looks to data from A.M. Best.) But "we've been the fastest-growing for the last 10 [years]," he added, noting that if trends continue "we will remain the second-largest."

Allstate declined to comment.

Geico has fueled its growth by spending big on multiple ad campaigns that relentlessly push a savings message. Geico's ad-spending rise has been astronomical, jumping from the 87th-biggest spending brand across all industries in 2003 to No. 7 in 2011, according to the Ad Age Data Center. Ad Age will publish 2012 brand data on July 8, but Geico seems poised to keep climbing. According to SNL, the marketer spent $1.1 billion on property and casualty insurance advertising last year, up 12.45% from the year before, ranking ahead of Allstate ($828.8 million) and State Farm ($777.9 million).

Geico's newest campaign, called "Did You Know?" will debut Monday. The ads, by Martin Agency, have some fun with the notion that "everybody knows" Geico's long-running tagline: "15 minutes could save you 15% or more on car insurance." In classic Geico-style, each spot ends with a one-liner. In one ad, a man replies to his wife that, "Yep, everybody knows that" after she repeats the tagline. Then she says: "But did you know that some owls aren't that wise?" In the next scene a female owl tells her "husband" about her plans for having lunch with a friend tomorrow. But all the male keeps saying is "Who?"

The savings tagline is "arguably the longest-running call-to-action tagline in advertising, going over 19 years," said Wade Alger, Martin's creative director for the Geico account. "We are the only ones who could question [our] own tagline."

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The campaign joins other ongoing TV campaigns including "Gecko Behind the Scenes," "Happier Than," and "Max Everywhere," which features Maxwell the Pig.

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