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Top 10 Car Insurance Companies by Market Share


Car insurance is an incredibly competitive market. Because auto insurance is a necessity in order to operate a vehicle in this country, there are few ways to create new demand; a company must either attract new drivers immediately or take existing business from another company. Some car insurance companies, like GEICO, pay a huge amount toward advertising each year in order to attract customers; other companies prefer a different approach, focusing its budget and staffing on licensed agencies that will push the policy to consumers.

An interesting thing to note about car insurance is that there are very few new companies selling car insurance. Every major car insurance company has been in operation for more than half a century. Additionally, over half of the insurance market is dominated by the top five car insurance companies; while there are independent or local insurance companies, the handful of major corporations are the best known and most powerful within the industry.

Who are the Top 10 Car Insurance Companies?

State Farm

Dominating the market with an 18 percent market share, State Farm holds nearly twice as many policies as any other company. State Farm was founded in 1922 and provides several types of insurance policies, including home and auto insurance. State Farm is a mutual company, meaning that all policyholders also own a share in the company. Not only is it the largest mutual insurance company in the world, State Farm is also the 34th largest company of any kind by revenue in the country.

State Farm employees a large number of agents and support staff in addition to the usual retinue of insurance adjusters. Because of the huge network of agents, State Farm actually employs twice as many people as any other company; putting this in perspective, State Farm’s size and revenue is even more impressive.

Allstate

Trailing after State Farm by eight percent, Allstate is the second-largest insurance company by market share. Allstate was founded in 1931 and provides numerous services, from car and home insurance to the more recent addition of supplementary medical insurance and life insurance policies. Traditionally focusing on providing policies through independent agencies, Allstate has shifted its influence to compete in the direct sales market as well.

Allstate has recently made impressive growth, pulling in $31 billion in 2010; massively out-shines State Farm’s modest $951million for that same year. If Allstate continues growing, it may be able to eclipse State Farm’s position within a few years, especially as it expands its products.

GEICO

GEICO stands for Government Employee Insurance Company and until fairly recently it provided car insurance only to government employees. Although it catered to a government clientele, GEICO has always been a privately-owned corporation. The company began offering coverage to the public in 1973 and started aggressively marketing to consumers in the late 1990s. Well-known for its humorous commercials, GEICO has rapidly gained in popularity over the past few decades.

GEICO is able to keep its policies fairly inexpensive by focusing on direct sales; by marketing directly to potential consumers through the company’s website or over the phone, GEICO is able to pay a smaller support staff than a company that relies on agencies to make the majority of sales.

Progressive

Another company well-known for its quirky commercials, Progressive is rapidly growing. It reported revenue of $15 billion in 2010, and is a major competitive force in the direct sales market. Employing slightly more staff than GEICO, Progressive nevertheless functions along a similar path: By focusing its attention on advertising, Progressive can lure in most customers without needing to rely heavily on agencies.

What makes Progressive especially unique in the marketplace is its forward-thinking corporate mindset and tendency to think outside of the box. Progressive was one of the first companies to introduce a pay-as-you go auto insurance policy; it was also the first company to provide competitor’s quotes on its own website.

Farmer’s

Like State Farm, Farmer’s insurance is a mutual company that was initially founded to provide coverage for farm equipment. Since its start in 1928, Farmer’s insurance has spread to encompass numerous types of policy, including automobile and home insurance. The company holds approximately 6 percent of the market share and reported a revenue of $1.7 billion in 2010, showing that Farmer’s is continuing to grow and strengthen.

Liberty Mutual

One of the older insurance companies to make it onto the top 10 list, Liberty Mutual was founded in 1912. Employing over 45,000 employees, Liberty Mutual provides coverage for home, auto, commercial, disability and liability insurance. The company also has subsidiaries in several other countries including Brazil, China and Ireland.

Liberty Mutual is also growing rapidly, reporting a $1.7 billion revenue in 2010. The company provides an even balance of direct sales and independent insurance agencies, catering to a wide market of customers.

USAA

United Services Automobile Association (USAA) provides insurance solely to individuals in the military and their families. Because of the limited customer base, USAA is a much smaller company than others on the list. Despite its size, however, USAA is extremely popular and manages to carry 4.4 percent of the market share; in 2010 USAA reported revenues of $2.6 billion, making it one of the highest-profiting companies on this list.

There has been some talk within the company of offering insurance policies to the greater public through a referral system. At this time, however, the only way to obtain a USAA policy is if you have been in the military or have an immediate family member in the service.

Nationwide

Founded in 1926, Nationwide insurance began as a farm bureau mutual company. Now, it has spread out to include several types of insurance as well as providing financial services. Its growth is more modest than other companies listed here, reporting revenues of just $959 million in 2010, but it does employ over 36,000 employees.

Nationwide has gained positive attention in recent years for its corporate diversity. Nationwide has provided public support of minorities, including gays and lesbians; it has also sponsored programming on PBS.

Traveler’s

The oldest insurance company on this list, Traveler’s was founded in 1853. While it rates low on the list for auto insurance, Traveler’s is majorly competitive in business and commercial insurance as well as personal property coverage. In fact, overall Traveler’s insurance is the largest insurance company in America by market value.

It should be unsurprising, then, that Traveler’s reported a revenue of $3.3 billion in 2010. Of its 32,000 employees, roughly 14,000 are agents; other employees include insurance adjusters and support staff. Traveler’s provides insurance to individuals, government agencies, corporate entities and many other diverse consumers.

American Family

Founded in 1927, American Family is a private mutual company providing several types of insurance. Primarily the company focuses on auto and homeowner’s coverage, it also provides life and health insurance as well as financial services for investments. Employing a small staff of just 8,500 employees, American Family managed to report a revenue of $6.3 million in 2010. It holds 1.9 percent of the total market share for auto insurance in the country.

As you can see from the list, most insurance companies carry a diverse number of products, from auto insurance to life insurance and even financial services such as lending. Many of the most popular auto companies are also mutual companies, meaning that the company’s success in the market is largely determined by the policyholders themselves.

Are these the Best Car Insurance Companies?

The size of an auto insurance company might be a good indicator of its quality. A company’s size may be an indication of its affordability or the quality of its service. Nevertheless, not all customers are happiest with a large insurance company, and a top-rated company may not be the best choice to suit your needs.

Criteria for “best insurance company” are hard to pinpoint, as well, as different customers are looking at different factors when deciding on a company. Some customers are attracted by price alone, whereas others are most interested in obtaining insurance coverage from a company with excellent customer service. Some people prefer the ease of purchasing a policy online while other people want to form a relationship with an agent.

Will these car insurance companies have the best rates?

Car insurance rates vary tremendously from one person to the next, regardless of what insurance company you choose. While you may certainly be able to receive cheaper auto insurance by changing companies, your rates are primarily dependent upon your own driving history and other personal factors.

Cheaper insurance isn’t always better. When comparing auto policies, you must be sure that you are comparing policies of equal value and similar coverage. While a quote from one company may be lower than a quote from another, the actual policy may not reflect these differences. Be sure that you understand everything on your auto insurance policy before agreeing to the insurance contract.

Whenever you’re shopping for a policy, the most important thing to consider is what you need from auto insurance and how much you’re willing to spend on that. You can obtain some free quotes online, ask for recommendations from friends and call the customer service line to get a feel for the company. Whether you opt for a major insurance company or a small local business, if you do your research you’re sure to obtain the right policy to suit your needs.Top 10 Car Insurance Companies by Market Share, 10.0 out of 10 based on 1 rating