Full Throttle.In the race for an increased share of the auto insurance market, State Farm is spending too long in the pit stop. The insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. is still No. 1 in direct premiums written with 16.7% of the market, well ahead of No. 2 Allstate This article is about the American insurance company. For the line of automobiles, see Allstate (automobile). The Allstate Corporation NYSE: ALL is the largest publicly held personal lines insurer in the United States. , which has 10.8% market share. But a look at the numbers over the last three years shows State Farm's lead is dwindling dwin·dle v. dwin·dled, dwin·dling, dwin·dles v.intr. To become gradually less until little remains. v.tr. To cause to dwindle. See Synonyms at decrease. (see "1999 Total Auto Lines," page 42). Two upstarts in the top 10 have been gaining ground. No. 4 Progressive and No. 6 Geico have increased advertising, cut rates and used direct-selling channels, such as toll-free telephone numbers A toll-free, Freecall, Freephone, or 800 number is a special telephone number, in that the called party is charged the cost of the calls by the telephone carrier, instead of the calling party. and the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , to increase their market share and chip away at the top three auto insurers--State Farm, Allstate and Farmers (see "Car Wars," page 34).The No. 5 auto insurer, Nationwide, has increased market share from 4% in 1997 to 4.1% in 1999, but was overtaken by Progressive, which grew from 3.5% to 4.5% during that time. Several factors combined to help Progressive move into 4th place, said Nancy Benacci, managing director of McDonald Investments in Cleveland Cleveland, former county, England Cleveland, former county, NE England, created under the Local Government Act of 1972 (effective 1974). It was composed of the county boroughs of Hartlepool and Teeside and parts of the former counties of Durham and . "They started their entree into the preferred market and the toll-free number," she said. "They had always kept rates pretty flat year after year; they had a really low combined ratio and cut rates." Like Geico, Progressive also began an aggressive advertising campaign, which increased brand awareness, Benacci said. With a big lead and strong customer loyalty, State Farm will continue to watch Geico and Progressive from its rearview mirror. "I don't think you'll see major market shifts," Benacci said. But sometimes objects in the mirror are closer than they appear. David Hilgen |
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