The American psychologist and philosopher William James once said, “Pessimism leads to weakness, optimism to power.” This may be the adage of the Top 25 Property/Casualty companies based upon the dollar amount of direct written premium growth from 2009 to 2010. In other words, in a market often described as soft, they see opportunity and embrace it.
For the quarter ending March 31, 2010, P/C companies comprising the Top 25 writers of P/C insurance in terms of premium growth applied their experience and, despite a difficult marketplace, increased their direct premium written by 13.5 percent over the quarter ending March 31, 2009. This represents an increase of approximately $2.75 billion in premium. In contrast, the more than 2,000 insurers that comprise the remainder of the industry did not fare as well. Their first quarter to first quarter direct written premium declined more than 4.7 percent, or nearly $4.69 billion. In total, direct premium written for the industry was down more than $1.94 billion. Details are shown in the chart that accompanies this article.
In an impressive display of growth, financial stability and the application of experience, the Top 25 carriers wrote more than 19.6 percent of the P/C industry’s direct written premium. In other words, less than 1 percent of the company count wrote nearly 20 percent of the industry’s direct written premium in the first quarter of 2010. Although the pricing cycle in the P/C marketplace continues to be characterized as soft, the aggressive growth exhibited by the Top 25 leads me to believe that the softest part of the cycle is behind us. It seems unlikely that the world-class companies comprising the Top 25 would need to be particularly competitive to grow.
If this is correct, the pricing cycle may soon reach its bottom. Firmer prices should assist all participants in the P/C industry in period-to-period premium growth. However, until a hard market is the reality, I expect the Top 25 to lead the industry in premium growth on both percentage and actual dollars bases. Their optimism will lead them to even greater power.
Top 25 P/C Companies in Premium Growth
Based Upon Dollar Amount of Direct Premium Written (DPW) Growth
Quarter Ending March 31, 2010 versus March 31, 2009
| DPW Growth Rank | Company Name | DPW 3/31/2010 | DPW 3/31/2009 | DPW $ Change | DPW % Change | 1 | National Union Fire Insurance Co. of Pittsburgh | 2,268,136,502 | 1,432,295,415 | 835,841,087 | 58.36% | 2 | Allstate Fire and Casualty Insurance Co. | 850,324,705 | 678,939,811 | 171,384,894 | 25.24% | 3 | Chartis Property Casualty Co. | 167,159,307 | 26,077,976 | 141,081,331 | 541.00% | 4 | State Farm Fire and Casualty Co. | 3,603,329,005 | 3,464,534,406 | 138,794,599 | 4.01% | 5 | USAA Casualty Insurance Co. | 918,230,065 | 792,830,589 | 125,399,476 | 15.82% | 6 | Travelers Home & Marine Insurance Co. | 512,234,664 | 394,839,565 | 117,395,099 | 29.73% | 7 | State Farm Mutual Auto Insurance Co. | 7,534,998,828 | 7,423,106,707 | 111,892,121 | 1.51% | 8 | GEICO General Insurance Co. | 1,460,464,696 | 1,369,109,567 | 91,355,129 | 6.67% | 9 | Liberty Mutual Insurance Co. | 884,425,302 | 808,166,077 | 76,259,225 | 9.44% | 10 | Starr Indemnity & Liability Co. | 77,491,405 | 1,703,469 | 75,787,936 | 4449.04% | 11 | Government Employees Insurance Co. | 1,076,958,889 | 1,007,841,147 | 69,117,742 | 6.86% | 12 | Universal Underwriters Insurance Co. | 216,792,545 | 149,017,384 | 67,775,161 | 45.48% | 13 | QBE Insurance Corp. | 218,054,108 | 150,345,547 | 67,708,561 | 45.04% | 14 | USAA General Indemnity Co. | 191,361,718 | 126,395,172 | 64,966,546 | 51.40% | 15 | AGCS Marine Insurance Co. | 78,583,958 | 14,222,657 | 64,361,301 | 452.53% | 16 | USAA | 1,386,916,259 | 1,324,434,099 | 62,482,160 | 4.72% | 17 | Fidelity National Indemnity Insurance Co. | 66,534,608 | 4,816,066 | 61,718,542 | 1281.51% | 18 | Garrison Property and Casualty Insurance Co. | 113,227,111 | 52,637,959 | 60,589,152 | 115.11% | 19 | Coast National Insurance Co. | 134,025,571 | 78,918,947 | 55,106,624 | 69.83% | 20 | American Security Insurance Co. | 461,980,821 | 408,339,841 | 53,640,980 | 13.14% | 21 | Peerless Indemnity Insurance Co. | 156,733,362 | 107,048,930 | 49,684,432 | 46.41% | 22 | Ace Property & Casualty Insurance Co. | 161,276,730 | 112,250,783 | 49,025,947 | 43.68% | 23 | Sentinel Insurance Co. Ltd. | 254,182,341 | 207,244,341 | 46,938,000 | 22.65% | 24 | Travelers Casualty & Surety Co. | 149,876,561 | 104,534,890 | 45,341,671 | 43.37% | 25 | Ironshore Specialty Insurance Co. | 87,286,822 | 44,128,246 | 43,158,576 | 97.80% | Top 25 Subtotal | 23,030,585,883 | 20,283,779,591 | 2,746,806,292 | 13.54% | All Other Companies | 94,182,700,786 | 98,871,434,939 | -4,688,734,153 | -4.74% | Total | 117,213,286,669 | 119,155,214,530 | -1,941,927,861 | -1.63% |
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Data Source: The National Association of Insurance Commissioners, Kansas City, Mo., by permission. Information derived from a Highline Data Product. The NAIC and Highline Data do not endorse any analysis or conclusion based on the use of its data.
Topics Carriers Profit Loss Pricing Trends Market Property Casualty Casualty
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