In this article, we will be taking a look at the 15 largest auto insurance companies in the US. To skip our industry discussion and see the 5 largest companies, you can go directly to go to 5 Largest Auto Insurance Companies In The US.
The significant technological advances being made in the automobile industry, namely the rise of electric and autonomous vehicles, are bound to have an impact on another sector: the auto insurance sector. These changes result in different customer needs and demands, which means that auto insurers will have to adapt to the times if they wish to stay relevant in this modern technological era.
Potential Growth For The Auto Insurance Sector
According to Ernst & Young, evolving mobility trends, telematics, and customer expectations are now beginning to challenge the legacy business models put forth by auto insurance companies. These challenges are forcing these companies to change the way they work and the type of work they do if they wish to adapt to a shrinking market size. Ernst & Young believes that by 2035, the changes felt in mobility trends, telematics, and customer expectations will shrink the market available to auto insurance companies by 31%. They are also expected to bring in newer competition, especially against older and more traditional insurers, while also transforming the way insurance is distributed, underwritten, and serviced.
In light of these factors, financial professionals today see insurance companies, and even companies like Berkshire Hathaway Inc. (NYSE:BRK-B), Metlife, Inc. (NYSE:MET), and The Allstate Corporation (NYSE:ALL), that offer a diverse range of insurance products, as going through a radical transformation during the next few years. Ernst & Young recommends that insurance carriers should begin to act now and fast to build business-to-business (B2B) distribution partnerships while also maximizing the benefits of telematics for their own gain.
Changing Trends In The Automobile and Auto Insurance Sectors
According to an article published by McKinsey in September, three major technologies will change the way the auto insurance sector operates in the next few years. These technologies, namely autonomous driving, connectivity, and embedded telematics, are said to be responsible for shaping the future of mobility and global auto insurance. McKinsey believes that not only will these technologies result in changing dynamics within the auto insurance industry, but they will also result in the same for original equipment manufacturers.
The impact of these new technologies on original equipment manufacturers relates to the increased access these companies will have to their customers and to vehicle data. This increased access also means that disintermediate insurers would be placed at a disadvantage in comparison to original equipment manufacturers. However, the article also notes that those insurance companies that manage to capitalize on insurance based on real-time vehicle usage can also be at a significant advantage if they play their cards right.
It cannot be disputed that new technologies that have made autonomous driving a real-life possibility today will have a significant impact on the auto insurance sector, and this impact may not be entirely positive. With more people opting for autonomous or self-driving cars, the frequency of car accidents is expected to decrease drastically. In light of this development, auto insurance is beginning to move towards becoming a “predict and prevent” product, according to the McKinsey article. Another key point from the article that is worth noting is that with the rise of autonomous vehicles, insurance liability is also being shifted from human operators to commercial parties that are responsible for the manufacture of autonomous vehicles and their technology.
All of the above shows only the beginning of the impact the auto insurance industry is bound to feel in the face of these new technological advancements. The way these advancements affect the sector is bound to show within the general performance of the property and casualty insurance sector at large. This is a sector that we have covered in another article before, where we highlight current dynamics within the sector and the growth it has been exhibiting. It is worth noting that despite skepticism surrounding the auto insurance industry today in light of the changing dynamics we have mentioned above, there is also a significant degree of widespread optimism among the financial public when it comes to the property and casualty insurance sector. Keeping this in mind, we felt that it would be worth compiling a list of the biggest auto insurance companies in the US today.
Photo by carlos aranda on Unsplash
To select the companies for our list below, we decided to pick market share in the auto insurance market as a ranking criterion. We looked up the market shares of these companies as of May 2023 and ranked them based on these numbers, from the lowest to the highest number.
Largest Auto Insurance Companies In The US
15. CSAA Insurance Exchange
Market Share: 1.12%
The California State Automobile Association (CSAA) Insurance Exchange was founded in 1914. It is an American Automobile Association (AAA) insurer.
The company provides automobile, homeowners, and personal lines of insurance only to AAA members through the AAA clubs. These clubs may be founded in 23 states and the District of Columbia. By May 2023, CSAA Insurance Exchange had written $3.9 million worth of direct premiums.
Like Berkshire Hathaway Inc. (NYSE:BRK-B), Metlife, Inc. (NYSE:MET), and The Allstate Corporation (NYSE:ALL), CSAA Insurance Exchange is a reputable and trusted insurance company.
14. Auto-Owners Insurance
Market Share: 1.28%
Auto-Owners Insurance, a mutual insurance company, was founded in 1916. The company focuses on providing life, home, car, and business insurance.
Auto-Owners Insurance has over 5,300 employees. The company sells its insurance policies through local and independent insurance agents. It operates within 26 states. By May 2023, Auto-Owners Insurance has written $9.1 million worth of direct premiums.
13. Erie Insurance
Market Share: 1.36%
Erie Insurance is an insurance company based in Erie, Pennsylvania. The company was founded in 1925, and it is a subsidiary of Erie Insurance Exchange.
Being a property and casualty insurance company, Erie Insurance offers auto, home, business, and life insurance products and services. The company relies on its network of independent insurance agents to conduct its business.
12. Auto Club Exchange
Market Share: 1.43%
Auto Club Exchange is a part of the American Automobile Association. It is based in Dearborn, Michigan, and has between 5,000 to 10,000 employees.
The company had written direct premiums worth about $4.5 million by May 2023. Auto Club Exchange offers auto, home, life, business, and travel insurance products and services, among more.
11. Kemper Corporation (NYSE:KMPR)
Market Share: 1.54%
Kemper Corporation (NYSE:KMPR) is a public auto insurance company based in Chicago, Illinois. The company was founded in 1990.
The companies falling under Kemper Corporation (NYSE:KMPR) provide insurance products and services to individuals, families, and businesses. They focus mainly on auto, home, and life insurance. The company has 10,000 employees.
10. Travelers Companies, Inc. (NYSE:TRV)
Market Share: 1.96%
Travelers Companies, Inc. (NYSE:TRV) is based in New York and is one of the largest writers of US commercial property and casualty insurance. It is also among the largest writers of US personal insurance through independent agents.
The company was founded in 1853 in Saint Paul, Minnesota. By now, it has become a renowned insurance company providing insurance coverage for people’s homes, cars, businesses, and other valuables. By May, Travelers Companies, Inc. (NYSE:TRV) had written direct premiums worth about $28.8 million.
9. American Family Insurance
Market Share: 2.07%
American Family Insurance was founded in 1927 as a private mutual company. It is based in Madison, Wisconsin.
The company provides property, casualty, life, health, and homeowners coverage. It also offers investment and retirement-planning products and services. American Family Insurance has 13,500 employees and claims to be the fourth-largest Wisconsin-based company.
8. Nationwide Mutual Insurance Company
Market Share: 2.31%
Nationwide Mutual Insurance Company, founded in 1926, is a group of large American insurance and financial services companies. It is based in Columbus, Ohio.
Since Nationwide Mutual Insurance Company was founded, it has become a large auto insurance company. In 2022, the company’s net income was $1.5 billion, and it held $270.2 billion in total assets. Nationwide Mutual Insurance Company generated revenues of $29.2 billion in 2022 as well. By this May, it had written direct premiums worth about $18.5 million.
7. Liberty Mutual Insurance
Market Share: 4.74%
Liberty Mutual Insurance is a diversified global insurance company operating within the property and casualty insurance segment. The company was founded in 2001 in Boston, Massachusetts, where it is still based.
Liberty Mutual Insurance has over 45,000 employees. The company works to provide group health insurance and personal auto and workers’ compensation. It achieves these goals through its network of brokers and agents. By May this year, Liberty Mutual Insurance had written direct premiums worth $36.2 million.
6. Farmers Insurance Group
Market Share: 4.88%
Farmers Insurance Group, based in Los Angeles, California, was founded in 1928. The company has 21,000 employees and over 48,000 exclusive and independent agents.
Farmers Insurance Group is an insurance group providing vehicle, home, and small businesses insurance. The company also offers other insurance and financial services products as well. By this May, it had written direct premiums worth $23.7 million. Farmers Insurance Group is a subsidiary of the Zurich Insurance Group.
Farmers Insurance Group, like Berkshire Hathaway Inc. (NYSE:BRK-B), Metlife, Inc. (NYSE:MET), and The Allstate Corporation (NYSE:ALL), is among the largest insurance companies operating within the US today based on its sizable market share in the auto insurance sector.
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Disclosure: None. 15 Largest Auto Insurance Companies In The US is originally published on Insider Monkey.