Insurance Premiums Climb to a Record $30B in Missouri in 2011

Missouri experienced a number of insurance industry “firsts” in 2011, including a record number of premium sales dollars, the largest-ever amount in claims paid for a single event in the state, and an historically high amount in additional claims funds recovered on behalf of insurance consumers.

In its annual report for 2011, the Missouri Department of Insurance, Financial Institutions and Professional Registration noted that 2011 was a year of records.

According to the department:

• The May 22, 2011, tornado in Joplin is so far the largest insurance event in Missouri history, with paid claims at $1.3 billion at the end of 2011. That number is expected to approach $2 billion.
• Premium sales in Missouri’s insurance industry reached $30 billion for the first time.
• Consumers who filed complaints received a record additional $19.2 million in insurance claims payments, the highest amount of recoveries in DIFP history. Consumers filed 12,460 complaints in 2011, compared to 7,692 in 2010.

“Our annual report will show that despite the unprecedented challenges of 2011, our department fulfilled the three-tiered mission of protecting consumers, encouraging competitive markets and enhancing state-based regulation,” said DIFP Director John M. Huff in the report.

Barton County Mutual

The department noted that in addition to its response to the Joplin tornado, one of its outstanding achievements for 2001 was the forging of an agreement between DIFP, Missouri Farm Bureau and the state Property and Casualty Guaranty Association, under which the Farm Bureau took on the policyholders Barton County Mutual Group, which became insolvent after Joplin tornado claims. Barton County Mutual had 41,000 insurance policyholders in southwest Missouri. Under a DIFP proposal, the Farm Bureau invested $14 million and took over its operations, saving the Guaranty Association the burden of covering the group’s unpaid claims.

Important Legislation

The annual report highlights two pieces of legislation passed in 2011 of importance to the property and casualty industry: SB 101 and SB 132.

SB 101 is intended to protect homeowners from unscrupulous repair contractors. Under the provisions of the bill, contractors who perform roof or other residential exterior work cannot offer to pay a homeowner’s insurance deductible to get the job. They also cannot negotiate an insurance claim on behalf of a homeowner, according to the DIFP.

SB 132 forbids municipal governments from restricting the activities of insurance companies in their attempts to provide claims services to storm victims. The department noted that some local ordinances in 2011 prevented insurers from setting up mobile command centers in storm-ravaged areas.

Complaints

The top insurance complaints recorded in 2011 are as follows:

In most lines of insurance, there were more companies offering coverage in Missouri at the beginning of 2011 than at the beginning of 2010, the department found.

Workers’ Compensation

The DFIP noted that the number of companies offering workers’ comp coverage at the beginning of 2012 increased by eight for a total of 311. As the number of companies offering coverage continues to grow, Missouri employers have a wider selection of insurance plans than ever before, the department said. It also noted that Missouri businesses now are paying less for coverage than they did in 1994. DIFP and industry analysts have predicted decreases in overall claims payments (loss costs) for six consecutive years. The frequency of on-the-job injuries has declined for 15 straight years, with a total reduction of 50 percent during that time.

Other Stats

• As of December 2011, Missouri reported at total of 1900 licensed insurance companies, including 209 domestic (Missouri) insurers, 1,559 Foreign (out-of-state) insurers and 132 Alien (non-U.S.) insurers.
• In 2011, the number of licenses issued to captive insurers increased by eight to 19. Captives again topped the $1 billion mark in premium volume ($1.7 billion).
• Premium taxes paid to the state’s general revenue and state school funds came to $229 million in 2011.
• There were 127,368 licensed insurance producers (agents), 12,844 licensed business entity producers (agencies) and 1,409 surplus lines producers in Missouri as of the end of December 2011.
• The department conducted investigations of 1,788 insurance agents in 2011 and brought actions against 109 of them.

Since 1870, Missouri’s insurance regulators have produced some form of published report, many of which were more than 200 pages. The DIFP’s 2011 annual report is the second one intended exclusively for online viewers. The agency said it switched to the digital format in an effort to improve efficiencies and maximize technology.

DIFP’s 2011 Annual Report is available at the department’s website, difp.mo.gov.

Topics Carriers Legislation Claims Workers' Compensation Homeowners Market Missouri