Insurers focusing their business on a single state or coverage line experienced decent levels of premium growth in recent years, but they also recorded higher combined ratios than diversified property/casualty carriers, according to a new analysis. Executive SummaryUsing a system that aims to review and evaluate insurers based on their focus and execution of their business model rather than on financial size, Demotech developed a company classification system. Here, President Joseph Petrelli and Chief Ratings Officer Barry J. Koestler II present recent results for various classes of regional and specialty carriers.
Demotech undertook an analysis of regional carrier growth and underwriting profit for Carrier Management, using direct written premium data and net combined ratios for the five-year period ended 2013.
The analysis breaks down regional carriers into finer categories—state specialists, regionals and super regionals (writing in more than one but less than 35 states)—based on definitions that Demotech first published in February 2007. In addition, the Demotech Company Classification System analyzes U.S. carriers with broader geographic footprints in the categories near national (writing in more than 35 but less than 45 states) and national (writing in at least 45 states), as well as several other categories. The precise category definitions are set forth in the related story “Demotech Company Classification System.”