Benjamin Franklin once said, “Without continual growth and progress, such words as improvement, achievement and success have no meaning.” In a market that continues to be described as soft, the Top 25 Property/Casualty companies give meaning to the word achievement. Their achievement is evident based upon the dollar amount of direct written premium growth from 2009 to 2010.
For the six months ending June 30, 2010, companies comprising the Top 25 writers of P/C insurance in terms of premium growth applied their experience and, despite a difficult marketplace, improved their direct premium written by 11.5 percent over the six months ending June 30, 2009. This represents an increase of approximately $4.95 billion in premium, showing measurable achievement by these companies.
As with past reporting periods, the more than 2,000 insurers that comprise the remainder of the industry did not fare as well. In fact, their second quarter to second quarter direct written premium declined approximately 2.3 percent, or nearly $4.57 billion. In total, direct premium written for the industry was up more than $380 million. Details are shown in the chart below.
In an impressive display of growth, financial stability and the application of experience for progress, the Top 25 carriers wrote over 20 percent of the P/C insurance industry’s direct written premium. Although the pricing cycle in the P/C insurance marketplace continues to be characterized as soft, the aggressive growth exhibited by the Top 25 leads one to believe that the softest part of the cycle is behind us. It seems unlikely that the world-class companies comprising the Top 25 would need to be particularly competitive on price to be able to grow.
If this reasoning is correct, the pricing cycle may soon reach its bottom. Firmer prices should assist all participants in the P/C insurance industry report period-to-period premium growth. However, until a hard market is the reality, I expect the Top 25 to lead the industry in premium growth on both percentage and actual dollar bases.
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