... And the results are in. Ward Group today announced the results of its 20th annual analysis of the top financial performance among more than 3,000 U.S.-based property/casualty insurers. The 2010 Ward’s 50 property/casualty group of insurance companies (listed below) produced a 14.3% return on average equity from 2005 to 2009, compared to 9.2% for the P&C 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 property/casualty group compared 7.3 points lower for the five-year combined ratio (91.4% compared to 98.7%), and grew policyholder surplus by 31.6% compared to 19.1% for the industry since 2005. Net premiums written for the Ward’s 50 property-casualty group grew 3.2% compared to the industry’s 3.1% decline.
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 8.1% lower for the Ward’s 50 property/casualty group of companies. “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 P&C Insurers (listed alphabetically)
Allstate Insurance Company
American Modern Insurance Group
Amica Mutual Insurance Group
Auto-Owners Insurance Group
Balboa Insurance Company
Bear River Mutual Insurance Company
Brethren Mutual Insurance Company
Brotherhood Mutual Insurance Company
Capital Insurance Group
Cincinnati Insurance Group
CSE Insurance Group
The Commerce Group, Inc.
The Doctors Company
Donegal Insurance Group
Erie Insurance Group
Federated Mutual Group
Fireman's Fund Insurance Group
First Insurance Company of Hawaii, LTD
Franklin Mutual Insurance Group
Goodville Mutual Casualty Company
Great American Insurance Companies
HCC Insurance Holdings Group
Island Insurance Companies Group
Kentucky Employers' Mutual Insurance
Louisiana Workers' Compensation Corporation
Metropolitan Property and Casualty Insur. Co.
North Star Mutual Insurance Company
Ohio Mutual Insurance Group
Old Republic Insurance Group
Philadelphia Insurance Companies
Progressive Casualty Insurance Company
RLI Insurance Group
Rural Mutual Insurance Company
Safety Insurance Group
Travelers Insurance Group
Vermont Mutual Insurance Company
Virginia Farm Bureau
W.R. Berkley Corporation Group
Western National Insurance Group
To see Ward Group's list of the Top 50 Life/Health Insurers, click here.
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