If the legendary brand chooses a new partner, it would be a significant loss for Horizon, which also lost its US operations for Burger King, Popeyes and Tim Hortons in April. The agency also won major accounts this year, including media functions for Kohl’s, Lionsgate, Slimfast and Bluetriton. The agency also recently launched Web3 and B2B practices.
Geico’s long-standing creative agency is The Martin Agency.
Recent reports show that Geico faces multiple business challenges. Long known for its clever advertising in which a bright green gecko touts Geico’s rock-bottom rates and easy-to-use system, Geico is now struggling to sustain such claims amid record inflation. In March, the brand, which is owned by Berkshire Hathaway Inc., raised its average auto insurance rates by 6% in Illinois, on top of a 6% increase the previous December. The company is battling the rising cost of replacing and repairing cars, according to its financial statements.
“GEICO’s pre-tax underwriting loss in the first half of 2022 reflects increased claims severity, primarily due to significant cost inflation in automotive markets, which began to accelerate in the second half of 2021.” , Geico’s parent company, Berkshire Hathaway, wrote in regulatory filings recently, citing increases in used-car prices leading to increased claims severity. Geico recorded a 2% increase in written premiums during its second quarter of 2022 compared to the prior year period.
In August, Geico closed 38 offices in California and stopped selling insurance over the phone in the state, according to a report from Insurance Business America, which noted that hundreds of agents were affected by the decision. Geico is also facing efforts to unionize New York employees, the Guardian reported.
Amid recent news, Geico faces more pressure in the highly competitive insurance landscape. While State Farm still holds the largest market share, growing rivals such as Progressive are challenging Geico. In 2020, the brand had a 6.4% share of direct premiums and Progressive 5.7%, according to data compiled by the Insurance Information Institute. Last year, while Geico reached a 6.5% share, Progressive grew faster to 6.1%, for example.
