Source: Bethan Moorcraft, Insurance Business

State Farm is no longer the largest car insurer in the United States. It has been overtaken by Progressive Corporation, which took a 14% market share in 2021, compared to State Farm’s 13.9%, according to GlobalData’s Insurance Database.

Progressive has been on a steady growth trajectory in motor insurance over the past few years, increasing its market share from 13.1% in 2020 to 14.0% in 2021, thanks partly to the company’s affiliation with a larger number of insurance agencies, as well as its successful advertising campaigns.

Meanwhile, GlobalData found that State Farm’s market share declined from 15.9% in 2017 to 13.9% in 2021.

In 2021, Progressive expanded its commercial motor business by acquiring Protective Insurance Corporation, which gave it a larger fleet and additional product lines. This acquisition helped Progressive record direct written premium (DWP) growth of 14.1% in 2021, compared to State Farm’s 3.5% growth.

Progressive’s DWP momentum was largely driven success in its commercial motor business, which grew by 50.2%, while its personal motor business grew by 8.1%, according to GlobalData. The insurer also saw good organic growth in 2021, increasing its policies in force (PIF) by 6%, adding 1.3 million new personal lines policies.

As the leading motor insurer in the country, Progressive also has better profitability than State Farm, according to GlobalData, with a motor insurance loss ratio of 67.0% in 2021 compared to State Farm’s 72.2%.

GlobalData expects Progressive to continue its positive momentum in 2023.

Swarup Kumar Sahoo, senior insurance analyst at GlobalData, commented: “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 (CAGR) 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.”