Demotech Inc. Reveals Leading Multi-State Property/Casualty Insurers

By | July 5, 2021

In order to continue the discussion regarding what constitutes a Super Regional P/C Insurer™ and to give definition to this important group of insurers, Demotech Inc. analyzed year-end 2020 data for property/casualty insurance companies. This data was utilized to classify and stratify insurers reporting data to the National Association of Insurance Commissioners. This year marks the 15th year of this effort, as the original criteria and objective definitions for Super Regional P/C Insurers™ and our other company classifications were established in the February 12, 2007, issue of Insurance Journal.

Demotech Company Classification System

The Demotech Company Classification System categorizes property/casualty insurers, not groups or families of insurers, into one of 11 categories based on an analysis of the data reported by the companies. The 11 categories that comprise the system are Nationals, Near Nationals, Super Regionals, Regionals, State Specialists, Coverage Specialists, Strategic Subsidiaries, Risk Retention Groups, Surplus Lines Carriers, Reinsurers, and companies with less than $1 million in direct premium written.

A company cannot be assigned to more than one category. Therefore, a company not designated as a Super Regional is given another classification, perhaps Near National, Regional, or State Specialist.

Super Regional Criteria and Thresholds

To determine the companies for the 2021 Super Regional Property/Casualty Insurer™ list, these specific, objective qualifying criteria and thresholds evaluated as of December 31, 2020, were used:

  • Active, individual companies;
  • Reporting data using the property/casualty annual statement format;
  • At least $1 million of direct premium written in each of two to 34 states;
  • Less than 90% of direct premium written in any one state;
  • Less than 90% of direct premium written in any one line of business;
  • Policyholders surplus of at least $100 million;
  • Net premium written of at least $50 million; and
  • Direct premium written of at least $25 million.

In general terms, a Super Regional is an individual company writing multiple lines of insurance in multiple states. Risk retention groups, surplus lines insurers, and reinsurers are not eligible for the Super Regional category as they are assigned to their own classifications.

Prior to the establishment of an industry-wide definition, a number of property/casualty insurers had referred to themselves as Super Regionals. Demotech, the official research partner of Insurance Journal, has compared the data to the criteria and updated the list of Super Regionals for 2021.

The 2021 Super Regional Property/Casualty Insurers™

For 2021, 145 Super Regional Property/Casualty Insurers™ were identified. They are presented in this Insurance Journal Special Report both alphabetically and by size as ranked by direct premium written as of December 31, 2020. For 2021, there are 12 Super Regional companies that were not classified as Super Regionals in 2020, as well as 15 insurers identified as Super Regionals in 2020 that have been reclassified into another category this year based on year-end 2020 information. Of the 145 Super Regionals for 2021, 65 have been designated as such for all 15 years that the Company Classification System has been applied.

Super Regional insurers are critically important to the insurance industry, and of particular importance to their agents, producers, and insureds. These companies are typically strong, stable markets that work hard for their agents, insureds, and their reinsurers. This is why Insurance Journal continues to have Demotech quantify and identify the criteria used to define an insurer as a Super Regional.

Insurers and readers are encouraged to review the selection criteria and thresholds used to determine the 2021 Super Regionals. The selection criteria remain quantitative and transparent. Demotech is focused on setting benchmarks at levels that accurately categorize the industry. The relative consistency of the company distribution over time suggests that the categorizations established are valid and effective in classifying the industry.

It is important to reiterate that the Demotech Company Classification System is an objective stratification of the companies that comprise the industry based on their business models. It is not equivalent to or suggestive of ratings of the individual insurers. Inclusion on the list does not imply that a company is superior to companies that were not included.

Future issues will report on the other categories within the Demotech Company Classification System.

Topics Carriers Property Property Casualty Casualty

About Barry J. Koestler II

Koestler II is the chief ratings officer of Demotech Inc., Insurance Journal's official research partner. More from Barry J. Koestler II

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