Google Confidential and Proprietary

Set 11, 2013

Todd Pollak Industry Director, Insurance & Services

Investing to Win The Future of Auto Insurance

Speed…

Convenience

ONE percent…

$4B

"Name your price" "So many risks..." "You need education"

"15 mins saves $$" "You need assistance"

DIY Agent

Required

U.S. P&C marketing spend continues to increase

Source: A.M. Best

Marketing spend for P&C carriers

$USD billions

Marketing spend, 2011

$USD millions CAGR, 2002-2011

Percent

Geico

State Farm

Allstate

Farmers

Progressive

Liberty Mutual

Nationwide

American Family

Travelers

AIG

USAA

19

15

18

17

20

18

19

16

41

5

12

1.000

813

745

718

536

332

277

167

166

125

92

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

1,7 1,9

2,4

3,0

3,4

4,1 4,3 4,2

5,1

5,9

Agent Direct

Decline of insurance agents

P&C Agents

Source: A.M. Beat; 10K reports, AIVA survey; PhoCusWright; ARC; ASTA.org

P&C Agents

10%

decrease in

workforce

95.000

100.000

90.000

1995 2000 2011

5 & 17 - Year views of a personal auto share

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995

-10%

0%

10%

20%

30%

40%

50%

60%

60.1%

55.0%

52.1% 48.4%

13.4%

11.6% 13.4%

17.4%

7.7% 9.7% 10.3% 6.7%

Exclusive agency National IA Direct Response

The consumer is faster, smarter and more

informed than she has ever been.

Consumers choosing more channels in the

shopping journey

Source: 2012 McKinsey Auto Insurance Customer Insights Research

Top 5 multichannel shopping journeys

Percent of shoppers

28% Direct

7% Direct Agent Agent

8% Mix of agent and direct Mix of agent and direct Agent

13% Agent Agent Agent

16% Direct Direct Agent Top 3 most

common journeys

Direct Direct

Direct Direct

Direct

Geico expense Ratio vs Peers

10%

15%

20%

25%

30%

Geico

Industry Average

PGR Direct

Chance in

accounting

for expenses

Geico Industry Average PGR Direct

Geico expense Ratio vs Industry

Relative profit margins by product line For a typical agent (%)

Auto

Source: Agent Interviews

Homeowners Specialty/Others Commercial Life

Book Mix (by policies in force) 5%

10%

15%

35%

46%

Top 10 U.S. Personal Auto Insurance Market Share Based on 2012 direct written premium

Rank Company 2012 2011 2010

1 State Farm Mutual Automobile Ins. 18.39 18.61 18.65

2 Allstate Corp. 10.01 10.31 10.67

3 Berkshire Hathaway Inc. (Geico) 9.59 9.07 8.50

4 Progressive Corp. 8.27 7.93 7.70

5 Farmers Insurance Group of Cos 5.89 5.89 5.96

6 USAA Insurance Group 4.84 4.60 4.36

7 Liberty Mutual 4.73 4.54 4.49

8 Nationwide Mutual Group 4.09 4.13 4.29

9 Travelers Companies Inc. 1.94 2.08 2.10

10 American Family Mutual 1.89 1.96 2.10

Source: SNL, Nomura research

Market Share (%)

5 & 17 - Year views of a personal auto share

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995

-10%

0%

10%

20%

30%

40%

50%

60%

60.1%

55.0%

52.1% 48.4%

13.4%

11.6% 13.4%

17.4%

7.7% 9.7% 10.3% 6.7%

Exclusive agency National IA Direct Response Regional IA

5 & 17 - Year views of a personal auto share

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995

-10%

0%

10%

20%

30%

40%

50%

60%

60.1%

55.0%

52.1% 48.4%

13.4%

11.6% 13.4%

17.4%

7.7% 9.7% 10.3% 6.7%

Exclusive agency National IA Direct Response Regional IA

18.8%

23.8% 23.3% 26.3%

Google Confidential and Proprietary

OBRIGADO