Direct premium written (DPW) for property/casualty insurance companies continues to increase. At year-end 2012, more than $523 billion of DPW was reported, which was an all-time high for the industry. For 2013, total DPW for all P/C insurers aggregately increased 4.1 percent over 2012, an increase of more than $21.5 billion. Nearly 58 percent of this premium growth is attributed to the Top 25 P/C insurers in terms of growth.
Overall, P/C insurance companies have continued to serve their clients by responding to catastrophic events, difficult economic conditions and regulatory uncertainty. For the 12 months ending Dec. 31, 2013, P/C companies comprising the Top 25 leveraged their experience and increased their DPW nearly 12.6 percent over 2012. This continues the Top 25 insurers’ impressive display of premium growth and financial stability. In contrast, the remainder of the industry reported an increase in DPW of only 2.2 percent, or $9.1 billion, year over year.
Moreover, while increasing DPW, P/C companies have aggregately maintained a sufficient level of policyholders’ surplus (PHS). One measure that determines if P/C companies are conservatively leveraged is the DPW to PHS ratio. An insurer’s DPW to PHS ratio is indicative of its leverage on a direct basis, without consideration for the effect of reinsurance. Since 2010, this ratio for P/C companies has remained conservative and stable at approximately 70 percent.
As stated in previous articles, although the market continues to exhibit signs of firming and DPW continues to increase, P/C insurers should not expect a traditional hard market in the near future. After reviewing those varying results, it is more realistic that expectations should relate to gradual, stable growth. If the industry continues to hold to its 10-year historical pattern, growth in 2014 would again lead to the highest level of year-end DPW ever reported by the P/C industry.
Top 25 Property/Casualty Companies
Based Upon Dollar Amount of Direct Premium Written (DPW) Growth
Year-End Results as of Dec. 31, 2013 Versus Dec. 31, 2012
|Company Name||DPW 12/31/2013||DPW 12/31/2012||$ Growth||% Growth|
|State Farm Mutual Automobile Insurance Co.||32,236,152,562||30,935,399,277||1,300,753,285||4.20%|
|State Farm Fire and Casualty Co.||17,971,068,027||17,021,682,666||949,385,361||5.58%|
|Rural Community Insurance Co.||2,530,898,816||1,740,138,904||790,759,912||45.44%|
|GEICO Casualty Co.||2,150,763,913||1,363,632,265||787,131,648||57.72%|
|Allstate Fire and Casualty Insurance Co.||5,264,962,684||4,605,761,469||659,201,215||14.31%|
|LM General Insurance Co.||1,399,800,010||760,283,461||639,516,549||84.12%|
|Liberty Insurance Underwriters Inc.||1,025,509,870||435,126,112||590,383,758||135.68%|
|Zurich American Insurance Co.||5,351,181,841||4,801,761,856||549,419,985||11.44%|
|USAA General Indemnity Co.||1,818,233,213||1,352,089,544||466,143,669||34.48%|
|Continental Casualty Co.||5,413,154,389||4,970,066,475||443,087,914||8.92%|
|Standard Guaranty Insurance Co.||596,785,539||170,691,928||426,093,611||249.63%|
|Allstate Vehicle and Property Insurance Co.||477,635,319||84,065,064||393,570,255||468.17%|
|GEICO General Insurance Co.||6,994,505,522||6,602,148,803||392,356,719||5.94%|
|Tokio Marine America Insurance Co.||386,036,085||43,752||385,992,333||—|
|GuideOne Mutual Insurance Co.||698,937,422||320,788,541||378,148,881||117.88%|
|Wesco Insurance Co.||965,218,360||609,392,169||355,826,191||58.39%|
|United Services Automobile Association||6,712,310,392||6,371,408,435||340,901,957||5.35%|
|Starr Indemnity & Liability Co.||1,372,452,343||1,032,595,665||339,856,678||32.91%|
|State Insurance Fund Workers’ Compensation Fund||2,283,286,622||1,943,837,922||339,448,700||17.46%|
|Ohio Security Insurance Co.||537,882,843||200,213,737||337,669,106||168.65%|
|Atlantic Specialty Insurance Co.||868,350,353||537,006,205||331,344,148||61.70%|
|USAA Casualty Insurance Co.||4,610,619,666||4,290,784,176||319,835,490||7.45%|
|Safeco Insurance Co. of Illinois||1,743,174,908||1,425,588,362||317,586,546||22.28%|
|Cincinnati Insurance Co.||3,297,205,566||2,993,431,243||303,774,323||10.15%|
|Travelers Property Casualty Co. of America||4,561,624,379||4,258,249,635||303,374,744||7.12%|
|Top 25 P/C Companies by DPW Growth||111,267,750,644||98,826,187,666||12,441,562,978||12.59%|
|All Other P/C Companies||433,307,922,863||424,195,781,227||9,112,141,636||2.15%|
Data Source: The National Association of Insurance Commissioners, Kansas City, Mo., by permission. Information derived from an SNL product. The NAIC and SNL do not endorse any analysis or conclusion based upon the use of its data.
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