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Who are the top insurance companies by market share?

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Market share is when all of the policies that are currently active are added together and then divided by 100. The company with the highest number of market shares has more policies currently active. That does not mean the company is the best or even that they have more customers, it only means that they have written more policies. For example, if you have 3 cars covered under the same insurance company, you have contributed to their market share three times more than someone with only one car, but you are still one customer, not three.

The top five auto insurance companies, highest first, are:

  1. State Farm
  2. Allstate
  3. GEICO
  4. Progressive
  5. Farmers Insurance

Between them, these five companies have more than 52% of the market share, State Farm leading the way with 18.6% of the market share, and Farmers Insurance trailing with only 6.4% of the market share.

To put market share into perspective, the leader, State Farm, has the lowest annual revenue of the top 5, and is the only one of the group with less than a billion dollars in reported income. What that means is that State Farm writes a lot of policies for existing clients, but they write far fewer policies than some of their closest competitors. And if you compare total policies rather than just car insurance, State Farm would still be a market share leader but the difference in number of individual clients would be even larger. This translates, economically, to mean that State Farm caters to a smaller group of more loyal clients.

Before you buy insurance based on the market share of the company, take the time to research the company more closely. Look at their A.M. Best rating, how well the company is rated by their customers and what the company offers in the way of discounts to keep you a happy customer.

answered Sep 19, 2011 by anonymous
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