p/c direct premium written up nearly 4.8 percent
DESCRIPTION
Direct premium written (DPW) for property/casualty insurance companies continued its upward trend during the first quarter of 2013. At year-end 2012, the industry reported more than $523 billion of DPW — an all-time industry high...TRANSCRIPT
28 | INSURANCE JOURNAL-NATIONAL August 19, 2013 www.insurancejournal.com
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News & Marketseffect of reinsurance. For first quarter 2013, this ratio (estimated for a full year) is 69.6 percent. Since 2010, this ratio has remained stable at about 70 percent. Although the market continues to exhib-it signs of firming and DPW continues to increase, P/C insurers should not expect a traditional hard market in the near future. The double-digit premium growth experi-enced in the historical hard market cycles may have created unrealistic premium growth expectations for this current recov-ery. It is more realistic to expect gradual, stable growth. However, if the industry con-tinues to hold to its recent, gradual growth trends, it will once again report its highest level of year-end DPW.
Powell is a senior financial analyst with Demotech Inc. Email: [email protected].
P/C Direct Premium Written Up Nearly 4.8%
Direct premium written (DPW) for property/casualty insurance companies
continued its upward trend during the first quarter of 2013. At year-end 2012, the indus-try reported more than $523 billion of DPW — an all-time industry high. For 2012, total
DPW for all P/C insurers aggregately increased 4.4 percent over 2011, an increase of nearly $22.3 billion. Through the first quarter of 2013, this growth trend has continued as DPW for all P/C insurers aggregately
increased 4.8 percent over 2012. For the three months ending March 31, 2013, P/C companies comprising the Top 25 insurers in terms of DPW leveraged their experience and increased their DPW nearly
12 percent over 2012. This continues the Top 25 insurers’ impressive premium growth and financial stability. The Top 25 account-ed for nearly half of the growth in the P/C industry’s DPW. In contrast, the remainder of the industry reported an increase in DPW of only 3 percent year-over-year. In examining DPW further, P/C compa-nies reported an aggregate increase in DPW through first quarter 2013 of 8.3 percent over first quarter 2008. P/C companies also have aggregately maintained a sufficient level of policyholders’ surplus (PHS). Insurers added nearly $36.5 billion to PHS since first quarter 2012. One measure that indicates P/C compa-nies are conservatively leveraged is the DPW to PHS ratio. An insurer’s DPW to PHS ratio is indicative of its premium leverage on a direct basis, without consideration for the
Top 25 Property/Casualty CompaniesBased Upon Dollar Amount of Direct Premium Written (DPW) GrowthYear-to-Date Results March 31, 2013 versus March 31, 2012
DPW DPW $ %Company Name 03/31/2013 03/31/2012 Growth GrowthState Farm Mutual Automobile Insurance Co. $8,051,907,645 $7,783,500,701 $268,406,944 3.45%State Farm Fire and Casualty Co. $3,928,914,263 $3,690,670,567 $238,243,696 6.46%GEICO Casualty Co. $518,987,709 $298,499,267 $220,488,442 73.87%Zurich American Insurance Co. $1,385,322,471 $1,208,419,514 $176,902,957 14.64%LM General Insurance Co. $294,441,063 $142,854,295 $151,586,768 106.11%Allstate Fire and Casualty Insurance Co. $1,252,146,432 $1,104,058,061 $148,088,371 13.41%Atlantic Specialty Insurance Co. $204,676,765 $64,516,434 $140,160,331 217.25%QBE Specialty Insurance Co. $289,300,737 $169,558,022 $119,742,715 70.62%Travelers Property Casualty Co. of America $1,180,866,908 $1,071,990,901 $108,876,007 10.16%USAA General Indemnity Co. $410,927,850 $302,058,500 $108,869,350 36.04%Factory Mutual Insurance Co. $693,601,798 $587,645,808 $105,955,990 18.03%Wesco Insurance Co. $241,610,034 $141,984,082 $99,625,952 70.17%United Financial Casualty Co. $207,365,447 $111,065,502 $96,299,945 86.71%GEICO General Insurance Co. $1,781,716,524 $1,688,342,934 $93,373,590 5.53%Cincinnati Insurance Co. $798,628,980 $706,598,593 $92,030,387 13.02%Safeco Insurance Co. of Illinois $389,635,959 $302,987,373 $86,648,586 28.60%QBE Insurance Corp. $345,023,321 $258,711,717 $86,311,604 33.36%Liberty Mutual Insurance Co. $1,224,231,712 $1,140,087,381 $84,144,331 7.38%Nationwide Mutual Insurance Co. $917,774,689 $835,027,217 $82,747,472 9.91%Esurance Property and Casualty Insurance Co. $205,106,766 $125,319,256 $79,787,510 63.67%USAA Casualty Insurance Co. $1,100,472,211 $1,021,050,103 $79,422,108 7.78%California Automobile Insurance Co. $95,704,142 $17,504,980 $78,199,162 446.73%COUNTRY Mutual Insurance Co. $355,792,659 $278,768,979 $77,023,680 27.63%United Services Automobile Association $1,575,240,015 $1,499,010,653 $76,229,362 5.09%Progressive Select Insurance Co. $281,608,462 $211,864,604 $69,743,858 32.92%
Top 25 by DPW Growth $27,731,004,562 $24,762,095,444 $2,968,909,118 11.99%All Other P/C Companies $103,897,486,125 $100,832,210,138 $3,065,275,987 3.04%
Total $131,628,490,687 $125,594,305,582 $6,034,185,105 4.80%
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.
By Douglas A. Powell