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 2021 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 is the 16th year of this effort; the original criteria and objective definitions for Super Regional P/C Insurers™ and our other company classifications were established in the Feb. 12, 2007, issue of Insurance Journal.
Demotech Company Classification System
The Demotech Company Classification System categorizes P/C 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 2022 Super Regional P/C Insurer™ list, these specific, objective qualifying criteria and thresholds evaluated as of Dec. 31, 2021, 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 P/C 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 2022.
The 2022 Super Regional Property/Casualty Insurers™
For 2022, 147 Super Regional P/C 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 Dec. 31, 2021.
For 2022, there are 13 Super Regional companies that were not classified as Super Regionals in 2021, as well as 11 insurers identified as Super Regionals in 2021 that have been reclassified into another category this year based on year-end 2021 information. Of the 147 Super Regionals for 2022, 64 have been designated as such for all 16 years that the Company Classification System has been applied.
In total, the 2022 Super Regional insurers reported more than $128.1 billion of surplus at year-end 2021. They wrote more than $81.9 billion of direct written premium and $111.2 billion of net written premium in 2021.
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 interested readers are encouraged to review the selection criteria and thresholds used to determine the 2022 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 type distribution over time suggests that the categorizations that have been 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. Moreover, inclusion on the list of Super Regionals does not imply that a company is superior to companies that were not included in that classification.
Future issues of Insurance Journal will report on the other categories within the Demotech Company Classification System.
Please send suggestions or comments to Barry Koestler at firstname.lastname@example.org.
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