The Ward's 50 added six new P&C companies to its list of top performers as the group once again substantially out classed the total industry in return on equity and other metrics.
This year's list saw the addition of the following carriers: Century-National Insurance Co., Cincinnati Insurance Group, Nodak Mutual Insurance Co., Texas Mutual Insurance Co., United Educators and Utica First Insurance Co.
Failing to make this year's list after appearing a year ago: Guard Insurance Group, Ameriprise, Infinity Auto Insurance, Capital Insurance Group, CSE Insurance Group and Star Insurance Co.
To make the Ward's 50 list carriers must pass safety and consistency tests based on five years of business performance. The data includes surplus and premiums of at least $50 million for each of the five years analyzed; net income in at least four of the past five years and compound annual growth in premiums between minus-10 percent and plus-40 percent.
Only three companies have made the Ward's list for 23 years in a row: GEICO, RLI Insurance Co. and USAA Group.
Among some of the findings, the Ward's 50 group Return on Equity from 2008 to 2012 stood at 9.9 percent outperforming the rest of the industry which came in at 4.9 percent. Last year's group did better, with an ROE of 11.2 percent compared to the total industry's 5.9 percent. One explanation for the drop is that 2008 marks the start of the great recession.
The Ward's 50 showed substantially better underwriting profit with a combined ratio of 96.4 for 2012 and five-year average of 94.6. That compares to the industry 103.4 for 2012 and 104.2 over the five-year period. Policyholder surplus for the group grew by 11.2 percent compared to 6 percent for the industry since 2008. Net premiums written for the Ward 50 grew 16.9 percent while the industry grew by 8.2 percent.
Another sign of superior performance is net underwriting gain as a percentage of premiums earned of 3.9 percent in 2012 and 6 percent for five years for Ward's 50. The industry had net underwriting loss of a percentage of premiums earned of 2.8 percent in 2012 and 3.5 percent for the five-year period.
Jeff Rieder, partner and head of Ward Group, a member of Aon Hewitt, says financial returns improved for insurers in 2012 and most sectors experienced revenue growth. Insurers “appear more optimistic as they look toward the future,” he says, adding that policyholder surplus is growing and the overall financial stability of the industry remains strong.
Begun in 1991, the Ward's 50 examine over 3,000 P&C companies domiciled in the U.S. and identifies the top performers based on objective data and subjective quality measurers.
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