GEICO ends Q3 with $2 billion profit
GEICO ended the third quarter of 2024 with a $2 billion underwriting profit, a significant increase compared to the same quarter last year.
For the first nine month of 2024, GEICO reported $5.7 billion in pre-tax underwriting earnings, compared to $2.2 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 less favorable development of prior accident years’ claims estimates, a rise in average claims severities and an increase in catastrophe losses.
Premiums written increased $761 million (7.3%) in the third quarter and $2.5 billion (8.4%) in the first nine months of 2024 compared to 2023, reflecting an increase in average written premiums per auto policy of 10.1%, primarily attributable to rate increases, partially offset by a 2.5% decrease in policies-in-force over the past year. The rate of decline in policies-in-force slowed in the first half of 2024, with growth experienced in the third quarter driven by increased new business and stable retention rates.
GEICO’s loss ratio was 71.4% in the third quarter and 72.6% in the first nine months of 2024, decreases of 8.6 percentage points and 9.9 percentage points, respectively, compared to 2023.
Underwriting expenses were relatively flat in the first nine months of 2024 compared to 2023. GEICO’s expense ratio in the first nine months of 2024 was 9.1%, a decrease of 0.6 percentage points compared to 2023, attributable to improved operating efficiencies and increased operating leverage, partially offset by increased advertising expenses.