Progressive corp., the fourth-largest U.S. auto insurer, boosted spending on marketing this year to win customers after scaling back in the second half of 2016 when increased costs from car accidents threatened the company's profit goals.
"We're excited to be back in, with full advertising," Chief Executive Officer Tricia Griffith said Friday in a conference call discussing results at the Mayfield Village, Ohio-based company. Now is the time to highlight the brand because more drivers will be getting "rate shock" from rivals that are raising premiums, she said.
Insurers have been hitwithhigher-than-expected claims as more drivers take to the road and succumb to distractions, such as texting on their smartphones. State Farm Mutual Automobile Insurance Co., the largest company in the industry, said last week that it had a $7 billion underwriting loss on car coverage last year. Progressive has been an industry leader in gathering data on driving trends, and prides itself on being quick to raise rates when necessary, and then win market share when rivals follow.
Progressive, which relies on the charisma of its spunky saleswoman Flo, has gained 12 percent this year, the best advance in the 21-company S&P 500 Insurance Index. The stock traded for $39.68 at 12:04 p.m. in New York, unchanged from Thursday's close.