GEICO ends Q1 with a big profit

GEICO ended the first quarter of 2024 with a $1.9 billion underwriting profit, a significant increase compared to the same quarter last year.

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 in the first quarter of 2024.

Premiums written increased $736 million (7.3%) in the quarter compared to 2023, reflecting higher average premiums per auto policy (9.8%) due to rate increases, partially offset by a 6.6% decrease in policies-in-force over the past year. However, the rate of decline in policies-in-force slowed in the first quarter of 2024, driven by increased new business and higher retention rates.

GEICO’s loss ratio was 72.5% in the quarter, a decrease of 10.5 percentage points compared to 2023.

Underwriting expenses declined $39 million (4.2%) in the quarter compared to 2023. GEICO’s expense ratio was 8.7% in the quarter, a decrease of 1 percentage point compared to 2023, attributable to improved operating efficiencies and increased operating leverage, partially offset by increased advertising expenses. GEICO significantly reduced advertising spend in 2022 and 2023, which contributed to reductions of policies-in-force.