Walnut Creek, CA-based CSAA Insurance Exchange, which markets auto insurance through partnerships with AAA clubs, celebrated its 100th anniversary in high style this year—recording the highest annual growth in premium revenue seen among any of the top 30 private insurers in the market since 2002, according to a new report from SNL Financial.
The company’s remarkable 23.07 percent year-over-year revenue gain was more than twice that of the next-closest competitor, GEICO, which itself saw a healthy 10.18 percent increase in premiums from 2Q13 to 2Q14. That gain brought CSAA’s total direct auto policy premiums for 2Q14 to $553.4 million, lifting it from 17th to 15th place in the market—past Auto-Owners and Mercury General, which both achieved only modest single-digit growth.
"Although there were some unique timing issues at play that influenced the quarterly numbers, our commitment to the customer experience—including a high level of customer service—has helped us expand our business,” said CSAA spokesperson Matt Skryja. “We have seen particular growth in the central and eastern regional markets we serve, while maintaining a strong presence in the Northern California market.”
No other Top 30 private auto insurer recorded double-digit growth. In fact, of the remaining companies on the list, only 7th-ranked USAA Insurance Group and 30th-ranked Cincinnati Financial Corp. (which broke into the Top 30 with $173.8 million in 2Q14 revenue) had growth of more than 7 percent.
The biggest year-over-year losers in the group according to SNL were 27th-ranked Kemper (down 14.13percent), 26th-ranked Sentry (down 6.94%) and 19th-ranked Auto Club Insurance Association Group (down 5.44 percent).
The report highlights shifting fortunes among the nation’s leading auto insurers. Only 17 out of the 30 companies on the list are still in the same spot they were a year ago, and only 12 are in the same spot they were in 2012.
That’s more change than the market leaderboard has seen in the past. “Auto insurance premium revenue has been growing faster over the last couple of years, but that growth is definitely not being evenly distributed across all market players,” says Terry Leone, SNL’s Manager of Insurance Industry Research. “The result is much more volatility in their relative performance.”
By growing twice as fast as Allstate, for example, GEICO was able to bump its publicly held competitor out of second place in SNL’s revenue rankings. Similarly, Liberty Mutual 5.56 percent gain in 2Q14—on top of its overall 9.35 percent gain in 2013—allowed it to pass Farmer’s, which experienced a loss of 2.53 percent in 2Q14 and 3.87 percent in 2013.
Healthy quarterly gains by private auto insurers are not necessarily a sign of rising fortunes, however. GEICO’s second-place quarterly growth of 10.18 percent in 2Q14, for example, belies a longer-term trend—since that number is down from 10.51 percent in 1Q and down even further from 11.3 percent in 2013.
A closer examination of Allstate’s numbers also reveals a deeper story. While the company as a whole recorded 2Q14 direct premium growth of 5.67 percent year-over-year, much of that growth was generated by its Esurance unit—which saw premiums increase a full 15 percent from $294 million 2Q13 to $338 million 2Q14. The Allstate auto insurance brand itself only grew by 4.9 percent in the same period.
The collective year-over-year premium growth for the market’s Top 30 companies in 2Q14 was 4.72 percent. That is slightly less than the 5.06 percent growth achieved by the industry as a whole during the same period.
Direct incurred loss ratios among the nation’s top private auto insurers also vary considerably. Insurers with the highest recorded loss ratios for the three months ending 6/30/14 were Auto-Owners (92.1 percent), Auto Club (78.74 percent) and USAA (77.89 percent). Those with the least were 24th-ranked NJ Manufacturers (55.5 percent), 9th-ranked Travelers (57.73 percent) and 14th-ranked MetLife (57.99 percent). The average loss ratio for the entire group in 2Q14 was 66.01 percent, which is a bit better than the broader industry’s 66.13 percent.
The complete report is publicly available at http://www.snl.com/InteractiveX/Article.aspx?cdid=A-29170331-14636
