...And the results are in. Ward Group today announced the results of its 20th annual analysis of the top financial performance among nearly 800 U.S.-based life and health carriers. The 2010 Ward’s 50 life/health group of insurance companies (listed below) produced a 16.1% return on average equity from 2005 to 2009 compared to 3.7% for the life-health industry overall.
“Most companies now understand the current economic situation and its impact on their business,” says Jeff Rieder, president of Ward Group. “However, the scars from the last two years are still affecting business decisions. It is important for companies to maintain a long-term vision throughout difficult business cycles. In selecting the Ward’s 50, we identify companies that pass financial stability requirements and measure their ability to grow while maintaining strong capital positions and underwriting results.”
Each Ward's 50 company has passed all safety and consistency screens, and achieved superior performance over the five years analyzed.
Safety and Consistency Tests
Insurance companies are evaluated and must pass minimum thresholds to be considered for the Ward’s 50 designation. Each company must pass the following primary safety and consistency tests:
• 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
• Risk-based capital ratio of at least 100% for each of the five years analyzed
• Compound annual growth in premiums between -10% and +40%
Key Performance Benchmarks
The firm says an important objective of Ward’s 50 is to compare their performance as a group with the rest of the industry. In addition to achieving greater levels of income returns, the Ward’s 50 benchmarks also outperformed in other key performance benchmarks.
The Ward’s 50 life/health group outpaced the industry for five-year policyholder surplus growth (8.4% compared to 5.6%) and premium income growth (12.4% compared to 1.3%).
A recurring theme with the Ward’s 50 companies, Ward says, is achieving greater levels of efficiency compared to peer companies.
“Although we do not directly use expenses as a factor in the Ward’s 50 evaluation, a common attribute of the top performing segment is the ability to operate at lower expense ratios,” Rieder says. In 2009, expenses relative to revenue were 16.8% lower for the Ward’s 50 life/health group. “Our research consistently finds the top companies achieve a proper balance between managing expenses and making prudent investments in systems or processes to meet customer needs and corporate goals,” he continues.
Ward's 2010 50 Life/Health Insurers (listed alphabetically)
Aetna Life Insurance Company
American Family Life Insurance Company
American Fidelity Assurance Company
American Republic Insurance Company
Amica Life Insurance Company
Auto-Owners Life Insurance Company
Baltimore Life Insurance Company
Berkshire Life Insurance Company of America
Centurion Life Insurance Company
Combined Insurance Company of America
Farm Bureau Life Insurance Company of MI
Federated Life Insurance Company
Fidelity Investments Life Insurance Company
Fidelity Security Life Insurance Company
First Investors Life Insurance Company
Forethought Life Insurance Company
General Re Life Insurance Corporation
Great American Life Insurance Company
Health Net Life Insurance Company
HM Life Insurance Company
Homesteaders Life Company
Household Life Insurance Company
Humana Insurance Company
Liberty National Life Insurance Company
Metropolitan Life Insurance Company
National Guardian Life Insurance Company
National Life Insurance Company
National Western Life Insurance Company
New York Life Insurance Company
Oxford Life Insurance Company
Ozark National Life Insurance Company
Pacific Guardian Life Insurance Company
Physicians Mutual Insurance Company
Primerica Life Insurance Company
Reliance Standard Life Insurance Company
Shelter Life Insurance Company
Southern Farm Bureau Life Insurance Co.
Standard Insurance Company
Symetra Life Insurance Company
Tennessee Farmers Life Insurance Company
Thrivent Financial for Lutherans
Trustmark Insurance Company
United Healthcare Insurance Company
United Life Insurance Company
USAA Life Insurance Company
USAble Life Insurance Company
Western & Southern Life Insurance Company
To see Ward Group's list of the Top 50 P&C Insurers, click here.
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