Delivering sustained economic value across business cycles is an elusive goal. To understand the “secret sauce” behind high performance, Accenture assessed the performance of the 50 largest P&C carriers in the U.S. market, for both commercial and personal lines, during the 10-year period from 2004 to 2013. The firm then split these results into three distinct market periods: pre-crisis (2004-2007,) crisis (2008-2010,) and post-crisis (2011-2013).

This article focuses on commercial lines and seeks to identify high-performing insurers. For purposes of this study, high performance will be defined in two ways, reflecting distinct strategic approaches to the market.

1. Consistent economic value creation and consistent above market growth. Carriers in this group:

• Consistently produce a combined ratio that generates a return on equity above the cost of equity. Calculating the CR level required to generate economic value includes a number of factors (such as surplus levels and investment income) and yielded a CR threshold of 95 for the 10-year period with varying levels in each year.
• Consistently deliver above market growth.

2. Consistent economic value creation and market sensitive growth. Carriers in this period:

• Consistently produce a combined ratio that generates a return on equity above the cost of equity.
• Grow faster than the overall market in at least one period while avoiding market disruptive exits (defined by direct premium written declines of more than 5%).

To assess consistency,performance was evaluated within three periods with distinct value creation conditions: