GEICO’s policy count decreases by ~14%

Berkshire Hathaway released its second quarter results and GEICO now counts two straight profitable quarters.

The insurer reported a $514 million gain in the quarter compared to a $487 million loss for the same period last year.

GEICO’s pre-tax underwriting earnings in the first six months of 2023 reflected higher average premiums per auto policy, a reduction in advertising costs, as well as reductions in prior accident years’ claims estimates.

GEICO’s loss ratio was 84.3% in the second quarter and 83.7% in the first six months of 2023, decreases of 8.5 percentage points and 7.5 percentage points, respectively, compared to the same periods in 2022. Combined ratio in the quarter stood at 94.7%, compared to 105% in Q2 2022.

Premiums written and earned were substantially unchanged in the second quarter and first six months of 2023 compared to 2022. Premiums in 2023 reflected rate increases during the past 12 months that produced higher average premiums per auto policy (16.3%), as well as a 2.7 million decrease (14.4%) in policies-in-force over that period. GEICO significantly reduced advertising in 2022 and 2023, which contributed to the reduction in policies-in-force.

For context, 2020 was the last year GEICO reported significant policy growth, adding 820k policies to its overall count during the period.