GEICO ends 2023 with a profit

Berkshire Hathaway released its 2023 results, which include GEICO’s performance.

The insurer ended the year with a $3.6 billion pre-tax underwriting gain, compared to a loss of $1.88 billion in 2022.

GEICO’s 2023 earnings reflected higher average premiums per auto policy, lower claims frequencies, reductions in prior accident years’ claims estimates and a reduction in advertising costs.

Premiums written reached $39.8 billion, an increase of $730 million (1.9%) compared to 2022.

GEICO’s loss ratio was 81% in 2023, a decrease of 12.1 percentage points compared to 2022.

Underwriting expenses declined $752 million (16.5%) in 2023 compared to 2022. GEICO’s expense ratio was 9.7% in 2023, a decrease of 2 percentage points compared to 2022, attributable to reduced advertising expenses and improved operating leverage.

Auto policies-in-force decreased by 9.8% during 2023. Based on our calculations, GEICO ended 2023 with ~1.7 million fewer auto policies compared to December 31, 2022. The insurer reported a reduction of 1.7 million auto policies during 2022. GEICO has around 16 million auto policies according to our estimates.

In terms of car insurance market share, Berkshire Hathaway reported that based on 2022 data, GEICO dropped from second to third with an approximate market share of 13.8%. The company had a 14.4% market share in 2021.

The insurer ended 2023 with 30,584 employees, which means that 2014 GEICO had more employees than today’s GEICO. The company experienced a 20% workforce reduction in 2023.