|Title:||United States top 15 commercial group underwriters ranked by direct premiums written in dollars and percent change for 2010 and 2011|
Start of full article - but without data
Top Commercial Group Writers, 2011
Commercial Group includes all lines of insurance coverage for
businesses. The lines with the most premium volume include
workers' compensation, commercial multiple peril, inland marine,
fire, medical professional liability and multiple peril crop.
($XXX) % Company 2011 DPW 2010 DPW Change
American International Group XX,XXX,XXX XX,XXX,XXX -X.XX% Travelers Group XX,XXX,XXX XX,XXX,XXX X.XX% Liberty Mutual Insurance Cos. XX,XXX,XXX XX,XXX,XXX X.XX% Zurich Financial Services NA Group X,XXX,XXX X,XXX,XXX -X.XX% ACE INA Group X,XXX,XXX X,XXX,XXX X.XX% Hartford Insurance Group X,XXX,XXX X,XXX,XXX X.XX% CNA Insurance Cos. X,XXX,XXX X,XXX,XXX X.XX% Chubb Group of Insurance Cos. X,XXX,XXX X,XXX,XXX X.XX% Nationwide Group X,XXX,XXX X,XXX,XXX X.XX% OBE Americas Group X,XXX,XXX X,XXX,XXX XX.XX% Allianz of America Cos. X,XXX,XXX X,XXX,XXX X.XX% State Farm Group X,XXX,XXX X,XXX,XXX -X.XX% Great American P & C Insurance X,XXX,XXX X,XXX,XXX XX.XX% Group W. R. Berkley Group X,XXX,XXX X,XXX,XXX XX.XX% Old Republic Insurance Group X,XXX,XXX X,XXX,XXX X.XX%
Source: (AMB) BestLink[R] State/Line (P/C Lines)--P/C, US
U.S. commercial group underwriters increased their direct written premiums by X% to $XXX.X billion in 2011 from 2010--the first year-over-year uptick since 2006, according to BestLink.
Commercial premiums are expected to continue to rise by X.X% in 2012, said Daniel Ryan, vice president of property/casualty ratings for A.M. Best Co.
"It is our belief that commercial insurers will continue to seek out incremental rate increases in 2012 to offset depressed investment returns and diminishing prior-year reserve releases," Ryan said.
Several factors are driving the growth, Ryan said, including the combination of low investment yields, potential loss cost inflation and sluggish economic conditions.
"Some companies are simply getting uncomfortable with current pricing levels while others are getting close to that inflection point where reported results are beginning to mirror accident-year results. The latter has a lot to do with the steady decrease in favorable prior-year reserve development. This is something A.M. Best has been concerned with for a couple of years now, "he said.
Also driving the increase were rate needs in workers' compensation and certain catastrophe-exposed commercial property lines, Ryan said.
The industry's $XXX.X billion in premiums at year-end 2011 was still down X.X% from 2007, according to BestLink, A.M. Best's online financial system, www.ambest.com/bestlink.
AIG Smaller, But Still on Top
American International Group Inc. remained the largest U.S. writer, although its commercial group direct written premium fell to $XX.XX billion, down X% from 2010 and down XX% from 2007.
The drop is the result of a "confluence of actions all stemming from the AIG crisis and U.S. government bailout in 2008," Ryan said. Among these actions were the divestitures of non-core insurance businesses, including companies such as Hartford Steam Boiler, XXst Century Insurance Group and Transatlantic Re.
"During this period, AIG also reduced its mortgage insurance operations and has taken a number of actions to right-size and de-risk its business relative to its post-crisis balance sheet,' Ryan said.
Peter Eastwood, president and chief executive officer of the Americas for Chartis, AIG's property/casualty operations, said, "When we think about market share and being the largest writer, it's a nice thing, but it's not our exclusive goal. We don't wake up every day and say, 'how can we be the largest writer of property/casualty in the U.S. or elsewhere in the world?' Our primary goal is to have returns on the business that are in excess of our cost of capital, and to provide our customers with products and services that are responsive to their needs. But the fact that we are the largest writer says that we are doing some really good things for our customers, and that results in them voting for us by giving us business. It's a validation to some degree of our franchise and the quality of work we do in the marketplace:'
The single biggest factor in Chartis' shrinking book has been the economy, he said. "It's basic supply and demand. There's been a significant retraction in demand for coverage."
Also, he acknowledged the fallout from the federal bailout of AIG.
"Clearly, there was also some impact from AIG's liquidity event in September 2008, and business has moved away from the organization as a result;' Eastwood said. "But we feel very good about where we are today."
Chartis is also focusing on growing internationally, where business may be more profitable, Eastwood said. "The industry is arguably running returns on equity of mid-single digits, and there are parts of the world where the returns are better, in some cases substantially better," Eastwood said. "We have upwards of XX different locations, and view that as a real competitive advantage."
In the first quarter of 2012, Chartis' U.S./Canada business represented about XX% of its total book, down from XX% in 2007. "On a $XX billion portfolio, a X% change can be fairly material," Eastwood said.
The company has also worked to restructure unprofitable business in the past two to three years. "Premiums on loss-sensitive casualty are down by about approximately $X billion as a result of our working with customers to restructure certain programs in a more capital-efficient way. We view that as a positive, because it helps us build a better return on equity," Eastwood said.
Rates are improving, but "we don't think the returns are where they need to be in U.S. casualty, especially in guaranteed-cost workers' compensation" Eastwood said. "While we think we are getting meaningful rate increases, we are not convinced we are getting the returns we need and we've been pulling back from the business," he said.
In speciality workers' comp, Chartis has dropped its premiums to $XXX million in 2011, down from $X billion in 2007.
Who Grew While AIG Shrank?
QBE Americas Group entered the top XX for the first time, boasting a XX.X% year-over-year growth in direct premiums written.
That increase is attributable to "our acquisition of NAU Country, third-largest writer of multiperil crop insurance in the U.S.," said Frank Centore, communications manager for QBE North America.
Also, three new companies now among the top XXX commercial writers may have benefited from AIG's 2008 troubles: Starr International Group, Ironshore Insurance Group and John Deere Insurance Co. All three have entered the market since 2007.
"Prior to MG's bailout by the U.S. government, Starr was previously a broker and a shareholder in AIG. Since then, Start has been actively engaged in establishing a worldwide insurance presence in the U.S. and abroad. Nearly all of Starr's business is sourced by its affiliated broker" Ryan said.
Starr Cos. is led by Maurice "Hank" Greenberg, longtime chairman and CEO of AIG until he retired in 2005.
Formed in late 2006, Ironshore has become "one of the fastest-growing start-ups," Ryan said. The company has "grown organically by hiring teams of people with access to large blocks of business."
Ironshore is led by two former AIG executives: CEO Kevin Kelley, the former chairman and CEO of Lexington Insurance Co., a subsidiary of Chartis; and Shaun Kelly, president and CEO of Ironshore's U.S. operations and former president and chief operating officer of Lexington Insurance Co.
John Deere commenced business in 2010 and is a wholly owned subsidiary of Deere & Co., the manufacturer of John Deere tractors, Ryan said. "All business is generated by a John Deere affiliate and was previously written by AIG," Ryan said. In 2010, John Deere Insurance began writing this business on a direct basis.
* Trending Now: Commercial property/casualty premiums are finally growing.
* Behind the Scene: Firming prices are tied to low investment yields, potential loss cost inflation and sluggish economic conditions.
* Shake-out: Starr Cos., Ironshore and John Deem benefited from AIG's troubles.