There are only three companies that have made it onto an annual list of 50 top property/casualty insurance performers for 25 straight years, according to the list’s publisher, Ward Group.
Ward flagged the names of GEICO, RLI Insurance Company and USAA Group with an asterisk to indicate their consistent appearance on the alphabetical list as it announced the latest group of insurers named to its Ward’s 50 list last week—a list that’s been compiled since 1991 based on various five-year financial performance measures.
While carriers move on and off the list from year to year, there were a full 43 among the 50 top performers that appeared on both the 2014 and 2015 lists, and nearly three dozen have been on the list for three straight years, according to a comparison done by Carrier Management.
ACE American tops an alphabetical list of carriers that were on the list in 2014 but not in 2015, while Amica Mutual heads up a corresponding alphabetical list of seven carriers that joined the list in 2015 but did not appear in 2014. The complete list of new names and departures is set forth below.
Chubb Group and HCC Insurance Holdings, both targeted in acquisitions recently (by ACE and Tokio Marine Holdings), are among the companies that have been members of the elite Ward’s 50 performers for at least three years.
Together the complete group of carriers making up this year’s Ward’s 50 list had an average combined ratio that was almost 7 points better than the P/C industry over the last five years—with a five-year combined ratio of 94.5, compared to 101.3 for the industry.
These 50 carriers also grew premiums faster and outpaced competitors in surplus growth. Net premiums written for the Ward’s 50 P/C group grew 28.5 percent, compared to the industry’s 18.4 percent for the industry since 2010; policyholder surplus by 30.2 percent compared to 21.9 percent for the industry over the past five years, Ward said.
The complete 50-member list, published alphabetically on Ward’s website, is derived by analyzing the financial results of more than 3,000 U.S.-domiciled P/C carriers using metrics such as:
- Five-year average return on average equity.
- Five-year average return on total revenue.
- Five-year growth in revenue.
- Five-year improvement in surplus to written premium.
- Five-year average combined ratio.
Although Ward did not reveal the individual metrics for the top carriers, in aggregate, Ward reports that the top 50 P/C insurers also produced a 10.9 percent statutory return on average equity from 2010 to 2014 compared to 7.8 percent for the P/C industry overall.
In addition to achieving higher financial returns, the Ward’s 50 benchmark has lower overall expense ratios, according to Jeff Rieder, partner and head of Ward Group. In 2014, expenses relative to revenue were 9.8 percent lower for the Ward’s 50 P/C group of companies.
In order to be eligible for the list, before companies are even evaluated on the various financial metrics, they must pass minimum safety and consistency thresholds:
- Surplus and premiums of at least $50 million for each of the five years analyzed.
- Net income in at least four of the last five years.
- Compound annual growth in premiums between -10 percent and +40 percent.
Ward also compiled a list of top 50 life/health insurers from a similar analysis of nearly 800 L/H companies.
Two of the 25-year stalwarts, GEICO and USAA, were among the organizations that have affiliated companies named to both the P/C and L/H Ward’s 50 lists. General Re Life, like GEICO, a member of the Berkshire Hathaway group and USAA Life, are the life counterparts.
About Ward Group
Ward Group, a McLagan/Aon Hewitt company, is a provider of benchmarking and best practices studies for insurance companies. The firm analyzes staff levels, compensation, expenses and business practices for all areas of insurance company operations and helps companies to measure results, optimize performance and improve profitability.
Source: Ward Group