According to Gail Sheehy, growth demands a temporary surrender of security. Although it is unlikely she was speaking of property and casualty insurance industry marketshare when she made this comment, it seems to me that she should have been. The 25 insurers with the largest increase in direct premium written over the six-month period ending June 30, 2007, are capable, financially stable and well-respected carriers.
They have intelligent professionals heading each of their functional areas. They are part of publicly traded companies that are scrutinized by insurance analysts and Wall Street. They have the financial stability to underwrite new business and address the needs of the marketplace. Their decision to grow was a conscious one despite of the challenges associated with growth.
For the period ending June 30, 2007, the Top 25 P&C insurance companies wrote an additional $4.9 billion in direct written premium over the same six-month period in 2006. The total direct written premium was $37.0 billion versus $32.1 billion in the prior period. Information on the Top 25 is presented below.
Our review of the reported financial position of the Top 25 indicated that each of the carriers reported sufficient surplus to support this growth. Furthermore, the insurance companies in the Top 25 were owned by, or part of, well-known and highly respected groups.
Demotech Inc. continues to believe that direct written premium growth should be measured by individual carrier, not by group. Our assumption is that individual companies should be utilized to assess changes in direct written premium. However, group strategy or holding company execution may be measured based on the gain or loss in net writings.
This seems reasonable because multiple insurance companies within a group exist for tactical reasons. Companies can pool or otherwise share written premium as they choose; however, direct writings provide the appropriate measure for analysis at the company level.
Four carriers that made the Top 25 at the end of the first quarter 2007 that fell from its ranks based upon growth through the second quarter 2007 were Indemnity Insurance Co. of North America, American International Specialty Lines Insurance Co., Government Employees Insurance Co. and Continental Casualty Co.
The four new entrants to the Top 25 were Continental Insurance Co., Liberty Mutual Insurance Co., Great American Insurance Co. of New York and Nationwide Insurance Co. of America.
When year-to-year growth in net written premium exceeds 33 percent, the Insurance Regulatory Information System ratio calculated by the National Association of Insurance Commissioners results in an exceptional (unusual) value. Accordingly, individual carriers often manage the growth of their net premium written.
Top 25 Property/Casualty Companies in Premium Growth
Based Upon Dollar Amount of Direct Premium Written Growth
Minimum $25 million DPW at June 30, 2006
Six-months ending June 30, 2007 versus June 30, 2006
($000 Omitted)
DPW $
Change DPW DPW DPW $ DPW %
Rank Company Name 6/30/2007 6/30/2006 Change Change
1 Lexington Insurance Co. 3,664,169 3,097,683 566,486 18.29%
2 Allstate Fire and Casualty Insurance Co. 701,391 267,528 433,863 162.17%
3 Mid-Century Insurance Co. 1,040,765 729,838 310,927 42.60%
4 State Farm Fire and Casualty Co. 7,286,998 7,040,370 246,628 3.50%
5 Allstate Property & Casualty Insurance Co. 2,192,118 1,946,333 245,785 12.63%
6 Liberty Mutual Fire Insurance 3,293,405 3,052,372 241,033 7.90%
7 State Farm Florida Insurance Co. 975,018 777,465 197,553 25.41%
8 American Home Assurance Co. 3,732,430 3,539,220 193,210 5.46%
9 Travelers Home & Marine Insurance Co. 338,702 149,482 189,220 126.58%
10 New Hampshire Insurance Co. 1,119,523 930,786 188,737 20.28%
11 Farmers Texas County Mutual Insurance Co. 552,834 371,892 180,942 48.65%
12 Praetorian Insurance Co. 416,555 248,952 167,603 67.32%
13 GEICO General Insurance Co. 2,400,038 2,235,394 164,644 7.37%
14 Balboa Insurance Co. 464,207 311,065 153,142 49.23%
15 American Security Insurance Co. 558,228 407,866 150,362 36.87%
16 Universal Property & Casualty Insurance 262,563 114,004 148,559 130.31%
17 ACE American Insurance Co. 2,210,031 2,061,521 148,510 7.20%
18 GEICO Indemnity Co. 1,424,278 1,282,160 142,118 11.08%
19 Philadelphia Indemnity Insurance Co. 743,175 615,371 127,804 20.77%
20 Continental Insurance Co. 364,478 237,472 127,006 53.48%
21 Liberty Mutual Insurance Co. 1,321,801 1,198,120 123,681 10.32%
22 Great American Insurance Co. of N.Y. 404,319 282,394 121,925 43.18%
23 Insurance Co. of the State of Pa. 841,126 725,953 115,173 15.87%
24 United Financial Casualty Co. 391,017 275,854 115,163 41.75%
25 Nationwide Insurance Co. of America 282,508 176,453 106,055 60.10%
Top 25 36,981,677 32,075,548 4,906,129 15.30%
Data source: The National Association of Insurance Commissioners, Kansas City, Mo., by permission.
Information derived from a Highline Data product. The NAIC and Highline Data do not endorse any analysis or conclusion based upon the use of its data. Copyright 2007 Insurance Journal.
Topics Trends Carriers Pricing Trends Property Casualty Casualty
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