Filed Under:Risk, Enterprise Risk Management

Non-Public Insurers Report Continued Rate Increases

NU Online News Service, April 20, 1:42 p.m. EDT

Non-public property and casualty insurance carriers are reporting continued rate increases as direct premium written increased about 4 percent in 2011 compared to paltry growth of less than 1 percent in 2010, according to a report from SNL Financial.

In a report based on company filings with the National Association of Insurance Commissioners (NAIC) by non-public insurance carriers, SNL says P&C insurers’ direct premium written increased 3.7 percent in 2011. This was a jump from the industry’s 0.3 percent growth rate in 2010.

SNL says its analysis, based on review of management discussion and annual statutory statements filed with state insurance regulators and annual reports of select reciprocal exchanges, privately held stock companies and mutual carriers “finds more evidence of the turn in the pricing cycle previously observed by the combination of agent surveys; retail brokers; and regional, commercial lines-focused insurers.”

The group led with Nationwide Mutual Insurance Co., as consolidated by SNL, generating 2011 direct premiums written of close to $15 billion, up 0.7 percent from the previous year.

SNL says it was the first year-over-year increase in direct premiums written since 2007 and the company’s largest since 2006.

The company says new business, customer retention and positive trends in average premiums “provided a lift.”

In the carrier’s management discussion, Nationwide Mutual says company operations produced direct premium written of more than $14 billion, up 0.4 from the previous year and its combined ratio rose more than 9 points to 110.7.

SNL says Farmers Insurance Group of Cos. produced growth in direct premium written in the personal and commercial lines of overall expansion of 0.7 percent including growth of 0.2 percent in personal lines and 3.2 percent in commercial lines.

In the management discussion and analysis for 2011, Farmers says net premiums written rose by more than $732 million to $14.86 billion. The company’s combined ratio rose 8.6 points to 107.9.

Erie Insurance Exchange, and its affiliated P&C companies, continued to grow premium and improve its competitive positioning through the combination of careful agency selection and increasing its market penetration into existing territories of operation.

SNL says group-level direct premiums written expanded almost 6 percent to over $4 billion, Erie’s fastest annual growth rate since 2004.

The company says it produced a combined ratio of 108, up 9 points from 2010.

Other companies SNL highlighted in the report include New Jersey Manufacturers Insurance Co., Federated Mutual Insurance Co. and FM Global Group.

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