GEICO ends Q2 with $1.78 billion profit

GEICO ended the second quarter of 2024 with a $1.78 billion underwriting profit, a significant increase compared to the same quarter last year.

For the first six month of 2024, GEICO reported $3.7 billion in pre-tax underwriting earnings, compared to $1.2 billion for the same period in 2023.

The underwriting profit reflected higher average premiums per auto policy, lower claims frequencies and improved operating efficiencies compared to 2023, partially offset by a rise in average claims severities and less favorable development of prior accident years’ claims estimates.

Premiums written increased $1 billion (10.7%) in the second quarter and $1.7 billion (8.9%) in the first six months of 2024 compared to 2023, reflecting an increase in average written premiums per auto policy of 11.3%, primarily attributable to rate increases, partially offset by a 4.3% decrease in policies-in-force over the past year. The rate of decline in policies-in-force slowed in the first half of 2024, driven by increased new business and higher retention rates.

GEICO’s loss ratio was 74.1% in the second quarter and 73.3% in the first six months of 2024, decreases of 10.2 percentage points and 10.4 percentage points, respectively, compared to 2023.

Underwriting expenses declined $80 million (7.9%) in the second quarter and $119 million (6.1%) in the first six months of 2024 compared to 2023. GEICO’s expense ratio in the first six months of 2024 was 8.8%, a decrease of 1.2 percentage points compared to 2023. The decline was attributable to improved operating efficiencies and increased operating leverage, partially offset by increased advertising expenses.