NU Data Insights: Expenses

Its expensive to underwrite property-casualty insurance, with 25 cents of every dollar going toward underwriting expenses. And it hasnt gotten a whole lot cheaper in recent years despite discussions of cost-cutting efforts by individual insurers.

Still, the overall net underwriting expense ratio for the property-casualty industry did drop roughly 2.6 points over the past seven years, from a level of 27.6 back in 1998. In 2003 and for the first nine months of 2004, the average industry statutory expense ratio on a net-of-reinsurance basis held at about 25.0.

In NUs second Data Insights issue of 2005, we present individual insurer and industrywide information for two large categories of insurer expensesdirect commissions and salariesand overall expense ratios, using figures compiled from the U.S. Insurance product of National Underwriter Data Services.

While our print edition only includes commission and salary information for the largest payers of these expenses, and an expense ratio ranking for 59 insurers that wrote more than $1 billion in net premiums in 2003, more complete listings can be accessed by clicking on the links below.

Guide to our Web site links:

  • Direct Commissions: Alphabetically lists 293 property-casualty organizations, displaying 2003 direct commissions and direct commissions percentages of direct premiums for 2001-2003. Organizations writing more than $100 million in direct premiums in 2003 are included (except for those writing more than 75 percent of their business in guaranty lines).
  • Contigent Commission: Alphabetically lists 293 property-casualty organizations, displaying contingent commissions, and percentages of premiums and total commissions for 2003.
  • Salary Trends: Alphabetically lists 293 property-casualty organizations, displaying 2003 salaries (including claims and underwriting), and annual salary growth since 1998.
  • Expense Ratio: Alphabetically lists 222 property-casualty organizations, displaying net expense ratios and expense ratio rankings for 2001-2003. Organizations with non-negative expense ratios writing more than $100 million in net premiums in 2003 are included (except for those writing more than 75 percent of their business in guaranty lines).

Reproduced from National Underwriter Edition, January 20, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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