Best’s News & Research Service - December 23, 2022 04:05 PM (EST)
BestWeek: US P/C Underwriting Expenses Remain Stable, American Equity Life Rejects Bid, State Farm Life Settlement
OLDWICK, N.J. //BestWire// - Brand recognition, marketing and technology are major factors in policy acquisitions, said AM Best Associate Director David Blades and Senior Industry Analyst Christopher Graham, in a story featured in this week’s BestWeek.
The top five spenders in terms of advertising expenses are the leading names in the industry, Blades said. There is definitely a correlation at the highest level in the industry, between advertising spending and premium revenue, he added.
The impact is evidenced particularly, in the private passenger, automobile insurance line of coverage, and homeowners coverage “when you’re talking about those leading insurers — State Farm, Allstate, Progressive Geico for Berkshire Hathaway, and even Liberty Mutual,” he said.
“When you look at it from that perspective, we’ve seen advertising used effectively by those companies in particular who do make up the top five in terms of the direct premiums written in the industry,” Blades said. “They’ve been able to protect themselves or grow from a brand recognition standpoint, but also protect their market share. We’ve seen that trend continue.”
Also in this week’s BestWeek:
— The board of directors at American Equity Investment Life Holding Co. has rejected an unsolicited, nonbinding proposal from Prosperity Group Holdings and its principal shareholder, Elliott Investment Management, to acquire American Equity in an all-cash transaction at $45 per share.
— A federal judge has given her preliminary approval to a $325 million settlement between State Farm Life Insurance Co. and a class of universal life insurance policyholders who allegedly were overcharged for fees that caused some policies to lapse prematurely.
— Barry Gilway, the head of Citizens Property Insurance Corp. in Florida who steered the insurer of last resort through multiple market cycles and challenges, plans to step down from his post in coming weeks.
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AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.
(By Lee McDonald: Lee.Mcdonald@ambest.com)