2001 Market Share For Insurers in Texas

Article

The 2001 premium and loss data for Texas verifies everything you heard from the insurance companies — it was a really bad year. Here are the highlights in review:
• Texas accounts for 7 percent of the national premium volume, unchanged from 2000.

• The aggregate loss ratio for all Texas companies for all lines of business is 96.9 percent (up from 78.5 percent in 2000), compared to the national loss ratio of 79.3 percent (up from 71.3
percent in 2000). This is the second year in a row that the Texas loss ratio has exceeded the national loss ratio since 1995.

• Texas independent agencies lost ground in the annual battle for personal lines market share. The 23.2 percent market share in auto and homeowners combined in the lowest percentage since IIAT began publishing this market share analysis in 1990. The highest percentage ever recorded during that time was 29.5 percent in 1990. Texas independent agencies in 2001 captured only 17.3 percent of the homeowners market and 25.3 percent of the personal auto market.

• In homeowners, loss ratios are just as advertised. Companies paid out almost $116 in claims for every $100 they collected in premium.

• Loss ratios in commercial multi-peril were down a little from 2000, but still unprofitable.

• In commercial auto, loss ratios went down (still unprofitable), while the total written premium went up more than 20 percent.

• After 5 years of loss ratios that were marginally unprofitable, the workers’ compensation loss ratios went out of control in 2001, to almost 90 percent.

This special report includes a line-by-line analysis of the Texas premium, loss and market share data for 2001.

PERSONAL AUTO
The personal auto loss ratio has been going up since 1997 and seems to be unable to return to a profitable level. With the homeowners line in a state of crisis, it looks like personal lines is something the agency companies will be trying to avoid for a while. The Texas loss ratio is higher than the national loss ratio for the second year in a row now. Independent agents lost market share in personal auto.

There was no change in the top 20 carriers in personal auto, and just a little shuffling of position within the top 20.

County mutual insurance companies increased their market share to 28.2 percent, compared to 26.7 percent in 2000 with a premium volume of $2.6 billion.

TOP 20 Personal Auto Carroes in Texas—2001
’01 Rank	Co. Name	’00 Rank	Total Premium*	Mkt. Share	Loss Ratio
1	State Farm	1	2,183.5	23.3%	81.8%
2	Allstate	2	1,562.6	16.7%	77.4%
3	Zurich/Farmers	3	1,212.3	13.0%	77.2%
4	USAA	4	583.4	6.2%	84.4%
5	Progressive	5	487.9	5.2%	57.6%
6	Nationwide	7	366.3	3.9%	84.7%
7	State National	8	333.1	3.6%	65.5%
8	Berkshire Hathaway (GEICO)	6	323.0	3.5%	81.7%
9	Farm Bureau	9	268.0	2.9%	87.2%
10	Home State	10	218.6	2.3%	67.9%
11	Old American	11	184.1	2.0%	64.4%
12	Travelers	12	154.3	1.6%	80.9%
13	Unitrin	13	153.3	1.6%	80.5%
14	SAFECO	15	111.0	1.2%	65.9%
15	Winterthur Swiss	17	96.8	1.0%	58.3%
16	Hartford	16	90.8	1.0%	74.0%
17	Liberty Mutual	19	79.3	0.8%	81.0%
18	Sentry	18	65.0	0.7%	57.5%
19	CNA	20	59.7	0.6%	192.3%
20	Titus	14	59.5	0.6%	74.1%
*Dollar figures in millions; Texas totals only

HOMEOWNERS
The homeowners line is a disaster. The loss ratio jumped from 82.6 percent in 2000 to 115.6 percent in 2001. The Texas loss ratio is 38 points higher than the national average. Hartford was the only company in the top 20 to post a profitable loss ratio—60.9 percent.

Despite the moratoriums implemented by many direct writers during the second half of 2001, market share for the top 20 carriers remained relatively unchanged. CGU and Beacon dropped out, replaced by Service Group and MetLife Auto & Home.

Independent agents didn’t fare any better as a result of the direct writers’ woes — market shares for independent agents dropped to 17.3 percent compared to 17.8 percent in 2000.

Top 20 Homeowner Carriers in Texas—2001
’01 Rank	Co. Name	’00 Rank	Total Premium*	Mkt. Share	Loss Ratio
1	State Farm	1	1,041.7	30.5%	122.8%
2	Zurich/Farmers	2	656.0	19.2%	117.6%
3	Allstate	3	571.7	16.7%	115.7%
4	USAA	4	225.2	6.6%	83.0%
5	Travelers	5	143.3	4.2%	110.7%
6	Nationwide	6	100.2	2.9%	137.6%
7	Chubb	8	67.4	2.0%	116.4%
8	SAFECO	7	60.1	1.8%	108.5%
9	Farm Bureau	9	53.4	1.6%	121.5%
10	Liberty Mutual	10	39.2	1.1%	123.0%
11	Hartford	11	35.6	1.0%	60.9%
12	Allianz	15	34.2	1.0%	187.4%
13	American National	16	31.7	0.9%	94.7%
14	CNA	12	31.4	0.9%	127.3%
15	Winterthur Swiss	14	30.3	0.9%	96.6%
16	Titus	13	30.3	0.9%	144.1%
17	Unitrin	17	25.9	0.8%	123.9%
18	Service	23	24.2	0.7%	86.8%
19	Amica Mutual	18	23.4	0.7%	116.9%
20	MetLife Auto & Home	21	19.7	0.6%	87.4%
*Dollar figures in millions; Texas totals only

COMMERCIAL MULTI-PERIL
The commercial multi-peril loss ratio remained unprofitable in 2001, but was one of only two lines that posted a decrease from 2000 — 85.8 percent compared to 87.5 percent in 2000. The national loss ratio for this line increased from 65.3 percent in 2000 to 82 percent in 2001.

The top 20 includes two new carriers. St. Paul improved from 21st to 15th, while GE Global (ERC) moved from 23rd to 19th, replacing last year’s 10th-ranked carrier Fairfax (Ranger) and 13th-ranked ACE-INA. Winterthur Swiss (Republic) came on strong, from 18th to 11th, after entering the commercial lines arena just a couple of years ago. The Zurich/Farmers combo took over first place from Travelers.

Top 20 Commercial Multi-Peril Carriers in Texas—2001
’01 Rank	Co. Name	’00 Rank	Total Premium*	Mkt. Share	Loss Ratio
1	Zurich/Farmers	2	157.7	12.1%	72.9%
2	Travelers	1	129.0	9.9%	66.2%
3	CNA	3	110.5	8.5%	106.4%
4	Hartford	5	71.9	5.5%	59.7%
5	State Farm	6	59.7	4.6%	68.3%
6	Chubb	8	55.1	4.2%	116.4%
7	Allianz	9	48.3	3.7%	135.1%
8	White Mountains	4	46.3	3.5%	67.1%
9	SAFECO	7	44.2	3.4%	58.5%
10	Liberty Mutual	16	38.7	3.0%	169.0%
11	Winterthur Swiss	18	28.7	2.2%	80.2%
12	Royal & SunAlliance	17	28.2	2.2%	49.5%
13	Nationwide	12	26.1	2.0%	78.8%
14	Kemper	11	25.9	2.0%	160.8%
15	St. Paul	21	24.4	1.9%	149.0%
16	GuideOne	14	23.8	1.8%	80.9%
17	Allstate	15	23.3	1.8%	71.1%
18	Old Republic	20	22.7	1.7%	41.9%
19	GE Global	23	21.0	1.6%	191.9%
20	Church Mutual	19	19.8	1.5%	64.6%
*Dollar figures in millions; Texas totals only

Texas	Texas	U.S.
Year	Premium	Loss Ratio	Loss Ratio
2001	$1,304.7	85.8%	82.0%
2000	$1,094.5	87.5%	65.3%
1999	$1,017.3	66.5%	69.7%
1998	$1,021.8	51.7%	65.8%
1997	$1,000.9	54.1%	58.6%
Commercial Multiperil		Five-Year Totals
Dollar Dollar Figures in Millions

COMMERCIAL AUTO
Profitability continues to elude commercial auto underwriters for another year, even though a 21 percent increase in written premium for this line contributed to a drop in the loss ratio from 84.3 percent to 79.3 percent.

There always seems to be a stable available market for this line, although it does appear that county mutuals are the ones providing the market. County mutuals increased their market share in commercial auto from 27.5 percent ($379.3 million) in 2000 to 29.9 percent ($497.6 million) in
2001.

Allianz (Fireman’s Fund) and Great American entered the top 20 in 2001, replacing Royal and CGU (combined now with Liberty Mutual at number 20).

Top 20 Commercial Auto Carriers in Texas—2001
’01 Rank	Co. Name	’00 Rank	Total Premium*	Mkt. Share	Loss Ratio
1	Zurich/Farmers	1	145.6	8.8%	74.8%
2	Winterthur Swiss	3	102.1	6.1%	70.0%
3	American International	4	100.9	6.1%	62.7%
4	State National	2	71.4	4.3%	79.8%
5	Progressive	9	70.9	4.3%	53.4%
6	CNAChubb	6	64.5	3.9%	120.2%
7	Travelers/Citigroup	5	63.5	3.8%	91.9%
8	State Farm	7	57.3	3.4%	80.6%
9	Allianz	22	55.7	3.3%	77.7%
10	Allstate	12	53.8	3.2%	68.6%
11	St. Paul	13	52.0	3.1%	69.9%
12	Hartford	11	45.9	2.8%	65.7%
13	Old American	8	45.5	2.7%	119.8%
14	Unitrin	14	43.4	2.6%	70.6%
15	Home State	19	42.3	2.5%	82.9%
16	Nationwide	17	39.5	2.4%	92.0%
17	Old Republic	16	38.1	2.3%	93.6%
18	Great American	23	35.5	2.1%	72.9%
19	SAFECO	18	27.8	1.7%	58.1%
20	Liberty Mutual	15	27.6	1.7%	123.2%
*Dollar figures in millions; Texas totals only

Texas	Texas	U.S.
Year	Premium	Loss Ratio	Loss Ratio
2001	$1,662.8	79.3%	75.2%
2000	$1,377.9	84.3%	78.2%
1999	$1,303.4	80.8%	76.2%
1998	$1,797.3	76.9%	74.8%
1997	$1,290.2	67.3%	68.1%
Commercial Auto		Five-Year Totals
DollarDollar Figures in Millions

WORKERS’ COMPENSATION
The party is over in workers’ compensation. After five years of steadily increasing loss ratios from the profitable levels of the early 1990s, the workers’ compensation loss ratio jumped more than 10 points in 2001, from 78.2 percent in 2000 to 89.5 percent in 2001. At least it’s not much worse than the national average loss ratio of 86 percent.

Texas Mutual Insurance Company continues to dominate market share with 17.7 percent of the business (up from 15 percent in 2000) and a loss ratio that’s more than 16 points better than the statewide average.

There was plenty of change in the top 20 carriers from 2000 to 2001, with five carriers out (Allianz, Highlands, SAFECO, Amerisafe, and Fremont) and five carriers in (ACE-INA, Service Group, Atlantic American, Chubb and Amerisure). Service Group is now in the 14th position, thanks in part to IIATmembers’ participation in the Comp Connection program.

Top 20 Workers’ Compensation Carriers in Texas—2001
’01 Rank	Co. Name	’00 Rank	Total Premium*	Mkt. Share	Loss Ratio
1	Texas Mutual	1	421.7	17.7%	72.9%
2	Zurich/Farmers	3	195.6	8.2%	94.5%
3	Liberty Mutual	2	176.5	7.4%	144.7%
4	CNA	5	166.4	7.0%	76.0%
5	American International	4	140.2	5.9%	84.7%
6	Kemper	6	118.2	5.0%	133.9%
7	Hartford	7	103.2	4.3%	53.8%
8	Royal & SunAlliance	9	87.8	3.7%	86.8%
9	St. Paul	10	60.4	2.5%	34.7%
10	Travelers/Citigroup	8	58.5	2.5%	81.0%
11	ACE INA	25	56.0	2.4%	42.3%
12	Old Republic	17	45.1	1.9%	82.1%
13	Swiss Re	14	43.5	1.8%	100.1%
14	Service	24	41.7	1.8%	43.5%
15	Fairfax	13	30.1	1.3%	41.5%
16	Unitrin	19	29.7	1.2%	89.6%
17	White Mountains	12	28.2	1.2%	147.5%
18	Atlantic American/Delta	21	28.6	1.2%	75.4%
19	Chubb	23	28.0	1.2%	39.2%
20	Amerisure	31	26.3	1.1%	90.2%
*Dollar figures in millions; Texas totals only

Texas	Texas	U.S.
Year	Premium	Loss Ratio	Loss Ratio
2001	$2,379.6	89.5%	86.0%
2000	$2,024.7	78.2%	84.2%
1999	$1,740.7	78.9%	81.2%
1998	$1,797.3	73.4%	72.2%
1997	$1,739.9	73.6%	62.7%
Workers’ Compensation		Five-Year Totals
Dollar Dollar Figures in Millions

THE 2002 OUTLOOK
Because of mold claims and deteriorating loss ratios, Texas finds itself in the national spotlight for the second year in a row. With eight months of 2002 already behind us, we can almost guarantee this year will not look any better. Coaches always prefer to call the year after two losing seasons the rebuilding year. After two consecutive losing seasons in the Texas insurance business, we’ll be optimistic and declare 2003 the year when it will all turn around. Premiums will be up, loss ratios will be down, and the public will once again have confidence that the insurance industry is anxious to sell a good insurance product for a reasonable price.

2001 Top 50 Companies From Group II Line Study
’01 Rank	Co. Name	’00 Rank	Total Premium*	’01 Mkt. Share	’00 Mkt. Share
1	State Farm	1	3,489.0	14.3%	14.4%
2	Zurich/Farmers	2	2,835.4	11.6%	11.4%
3	Allstate	3	2,286.1	9.4%	9.4%
4	American International	4	946.1	3.9%	3.9%
5	USAA	5	862.2	3.5%	3.7%
6	Travelers/Citigroup	6	835.4	3.4%	3.5%
7	CNA	9	451.3	2.5%	2.4%
8	Nationwide	8	429.6	2.5%	2.5%
9	Progressive	7	428.2	2.3%	2.5%
10	Hartford	11	421.7	1.8%	1.9%
11	Allianz	15	416.7	1.8%	1.6%
12	Liberty Mutual	10	401.0	1.8%	1.4%
13	Texas Mutual	19	391.7	1.7%	1.4%
14	State National	14	391.0	1.7%	1.7%
15	Berkshire Hathaway	12	368.7	1.6%	1.7%
16	Southern Farm Bureau	13	364.6	1.6%	1.7%
17	Chubb	16	338.2	1.6%	1.6%
18	St. Paul	20	325.1	1.5%	1.3%
19	Unitrin	17	320.1	1.5%	1.6%
20	Kemper	21	299.0	1.4%	1.3%
21	SAFECO	18	274.9	1.3%	1.5%
22	Winterthur Swiss	22	261.4	1.3%	1.2%
23	ACE INA	27	258.9	1.2%	0.9%
24	Royal & SunAlliance	26	247.1	1.1%	1.0%
25	Home State	23	173.3	1.1%	1.1%
26	Great American	28	171.7	1.1%	0.9%
27	Old American	25	155.1	1.0%	1.0%
28	Old Republic	33	136.0	0.7%	0.6%
29	White Mountains	24	126.0	0.7%	NA
30	Germania Mutual	31	124.3	0.6%	0.7%
31	GE Global	32	123.3	0.6%	NA
32	Titus	29	120.5	0.5%	0.9%
33	Fairfax	30	115.4	0.5%	0.8%
34	Sentry	34	95.0	0.5%	0.5%
35	W.R. Berkley	38	93.3	0.5%	0.3%
36	XL American	44	85.2	0.5%	0.3%
37	Health Care Indemnity	38	84.7	0.4%	0.3%
38	FM Global	40	79.0	0.4%	0.3%
39	HDI US	79	77.0	0.4%	NA
40	Service	54	76.0	0.3%	NA
41	American National	39	71.7	0.3%	0.3%
42	Hochheim Prairie	41	71.3	0.3%	0.3%
43	Markel	53	70.4	0.3%	NA
44	MetLife Auto & Home	48	69.5	0.3%	0.3%
45	United National	60	65.6	0.3%	NA
46	Legion	49	65.1	0.3%	0.3%
47	Swiss Re	43	63.3	0.3%	0.3%
48	Centurion	37	61.3	0.3%	0.4%
49	National American	36	60.9	0.3%	0.4%
50	Mortage Guaranty	45	58.6	0.3%	0.3%
*Dollar figures in millions; Texas totals only

David Surles is the Director of Insurance Programs and Regina Anderson is the Manager of Technical Services for the Independent Insurance Agents of Texas.

Topics Carriers Texas Auto Profit Loss Agencies Workers' Compensation Personal Auto Homeowners Allianz Chubb