2013 Super Regional Insurers

Demotech Inc. Reveals Leading Multi-State Property/Casualty Insurers

The original criteria and objective definition for Super Regional P/C Insurers™ was established in the Feb. 12, 2007, issue of Insurance Journal. Prior to the establishment of an industry-wide definition, a number of property/casualty insurers had referred to themselves as Super Regionals. Demotech Inc., the official research partner of Insurance Journal, has compared the data to the criteria and updated the list of Super Regionals.

To continue the discussion regarding what constitutes a Super Regional and to give definition to this important group of insurers, Demotech, a financial analysis firm based in Columbus, Ohio, analyzed year-end 2012 data. This data was utilized to classify and stratify insurers reporting data to the National Association of Insurance Commissioners (NAIC).

Company Classification System

The experts at Demotech have refined their classification system for property/casualty insurance companies. The Demotech Company Classification System categorizes property/casualty 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 select the companies for the Super Regional Property/Casualty Insurer™ list, Demotech used these specific, objective qualifying criteria and thresholds:

• Active, individual companies not under regulatory supervision at Dec. 31, 2012;
• Reporting data using the property/casualty annual statement format;
• At least $1 million of direct premium written (DPW) in each of two to 34 states at Dec. 31, 2012;
• Less than 90 percent of Dec. 31, 2012, DPW in any one state;
• Less than 90 percent of Dec. 31, 2012, DPW in any one line of business;
• Policyholders surplus of at least $100 million at Dec. 31, 2012;
• Net premium written of at least $50 million at Dec. 31, 2012;
• DPW of at least $25 million at Dec. 31, 2012.

2013 Super Regional P/C Insurers™

In general, a Super Regional Property/Casualty Insurer™ 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.

Demotech identified 161 Super Regional Property/Casualty Insurers™ for 2013. They are presented in this exclusive Insurance Journal special report both alphabetically and by size as ranked by direct premium written as of Dec. 31, 2012.

Also included are the 15 companies that are new to the Super Regional classification, as well as nine insurers that have been reclassified into another category based on year-end 2012 information.

“Super Regional insurers are critically important to the insurance industry, and of particular importance to their agents, producers and insureds,” said Joseph Petrelli, president, Demotech. “These companies are strong, stable markets that work hard for their agents, insureds and their reinsurers. This is why Insurance Journal expressed interest in having us quantify and identify the criteria used to define an insurer as a Super Regional.”

Insurance Journal and Demotech expect this year’s report to advance the discussion on the role of Super Regionals, as well as the definition and criteria used in determining the classification, so that future reports can continue an industry dialogue on Super Regional Property/Casualty Insurers™.

Insurers and interested readers are encouraged to review the selection criteria and thresholds used to determine the 2013 Super Regionals. Selection criteria remain quantitative and transparent. We are 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 we have established are valid and effective in classifying the industry.

This is an objective stratification of the companies that comprise the industry based on their business models, not ratings of the individual insurers. Inclusion on the list of Super Regionals does not imply that a company is superior to companies not eligible for that classification.

Future issues of Insurance Journal will report on the other categories within the Demotech Company Classification System.

Send comments or suggestions to Barry Koestler at bkoestler@demotech.com or Andrew Simpson, vice president of content, Insurance Journal, at asimpson@insurancejournal.com.

Topics Carriers Property Property Casualty Casualty