Being the best of the best is something every company wants to achieve. Ward's Group, a consulting group for insurance companies recently released its list of the best of the best property and casualty insurers in its Ward's 50 list for 2012.

Ward's analyzed the financial performance of 3,000 P&C insurers domiciled in the United States and identified the top 50 performers in terms of safety and consistency screens and achieved superior performance over the five years analyzed. The group produced statutory return on average equity for a five year period ending 2011 was more than five points better than the total P&C insurance industry during that period.

Comparisons are based on benchmarks set by the Ward's 50 group of companies and are available for individual companies and the total industry.

Click on to see the list of Ward's 50 top performers (listed alphabetically) to see what makes these companies unique, including the three companies that have achieved this honor for 22-years in a row.

This is the 22nd year Ward Group has conducted its analysis. The Ward's 50 P&C group of insurance companies produced an 11.2 percent statutory return on average equity from 2007 to 2011 compared to 5.9 percent for the P&C industry overall.

Explains Jeff Rieder, partner and head of Ward Group, “Financial returns for insurers declined in 2011 due to many factors including severe catastrophes, competitive pricing, low interest rates, high unemployment and sluggish economic growth.”

“Although results declined in nearly every sector of the industry, policyholder surplus and overall financial stability for the industry remains very strong. Companies are investing in new systems, improving internal processes and focusing on developing new capabilities to meet customer demands,” says Rieder.

“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,” observes Rieder

Safety and Consistency

Insurance companies are evaluated and must pass minimum thresholds to be considered for the Ward's 50 designation. Each company must pass primary safety and consistency tests, including:

• Surplus and premiums of at least $50 million for each of the 5 years analyzed.

• Net income in at least 4 of the last 5 years.

• Compound annual growth in premiums between negative 10 percent and 40 percent.

Performance Measurements

Companies that pass the safety and consistency tests are measured and scored on the following elements:

• Five Year Avg. Return on Avg. Equity

• Five Year Avg. Return on Avg. Assets

• Five Year Avg. Return on Total Revenue.

• Five Year Growth in Revenue

• Five Year Improvement in Surplus to Written Premium

• Five Year Avg. Combined Ratio

Key Performance Benchmarks

An important objective of the 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. [RLI is one of three recipients of the Ward's 50 honor for 22-years in row.]

The Ward's 50 property-casualty group compared 10 points lower for the five year combined ratio (92.8 compared to 102.8) and grew policyholder surplus by 26.4 percent compared to 8.6 percent for the industry since 2007.

Net premiums written for the Ward's 50 property-casualty group grew 11.8 percent compared to the industry's 2.1 percent growth.

In addition to achieving higher financial returns, the Ward's 50 benchmark continues to achieve lower expense ratios.

“The expense ratio has been declining slowly for insurers but still remains higher than historical levels. Our research finds the Ward's 50 benchmarks gain significant advantages by effectively managing expenses,” says Mr. Rieder. [GEICO and USAA Group have received the Ward's 50 honor for 22-years in a row.]

In 2011, expenses relative to revenue were 7.3 percent lower for the Ward's 50 P&C group of companies.

Special Reports /

2012 Ward&rsquo;s Top 50 Performing P&C Insurers

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