Law of Large Nos. (for Ads)

Auto insurance industry competition is intense, but that's not new. Because auto insurance is a commodity product, media spending has always been important. But, this graph depicts the dramatic increase in spending, causing me to ask myself, "what has changed so much since 2003?" My only guess is the Internet.

BRK reports that while its GEICO policies issued have risen from 5.7 million in 2003 to 8.1 million in 2006 for a 42% increase, the media spend at GEICO has risen from $238 million to $631 million during the same period. The current media spend at GEICO is now nearly $80 per policy. GEICO wouldn't spend the money unless it was effective. So, who's the loser? Here again I have only one guess: insurance agents. Just as travel agents have seen dramatic changes due to the Internet, so too, it appears that the personal auto insurance industry is being rapidly reshaped.