National Underwriter's annual list of the Top 100 P&C insurance groups provides a snapshot of the industry's volatility of late.
A year after catastrophes wreaked havoc on most insurance groups' financial numbers, the overall combined ratio of the Top 100 in 2012 improved about 6.2 points to about 104.8—still an unprofitable number, but better than the previous year.
Had it not been for Superstorm Sandy, which pounded the Northeast in late October 2012 and caused most of the industry's $35 billion in catastrophe losses, the effects of price and exposure improvements would have been even more evident.
Following the lead of 2011, net premiums for the Top 100 groups in 2012 increased 3.9 percent, compared with 4 percent growth in net premiums the prior year.
Most notably, the Top 5 insurance groups in 2012 very nearly broke even on the combined ratio and improved net premiums written (NPW) 4.5 percent over 2011.
The Top 100 continues to be top-heavy. The Top 5 groups represent 37.4 percent of NPW by the whole list, and the Top 10 groups accounted for 56.7 percent of the Top 100's net premiums.
And for the first time in recent memory, there is a shift in the Top 10 not due to an acquisition.
Warren Buffett's Berkshire Hathaway, led by the group's auto-insurance subsidiary Geico, leapt over Allstate in 2012 to become the second-largest P&C insurance group based on NPW. The Berkshire group saw a 2012 increase in NPW of 12.1 percent—the largest such growth in the Top 20.
Berkshire's Geico maintained its position as the fifth-largest P&C insurance company while increasing NPW 4.6 percent. Meanwhile, Berkshire's National Indemnity Co. increased NPW more than 38 percent to jump four spots to No. 7 in the Top 100 companies (p. 35).
Geico Casualty Co. receives the award for the biggest jump among insurance companies. The Berkshire subsidiary was off the list at 114 in 2011 but appears in the 60th spot in 2012 after more than doubling NPW.
Once again, State Farm by leaps and bounds retained its title as the largest P&C group in 2012 but it grew NPW at a slower rate than the previous year, when growth was 2.4 percent over 2010.
Overall, the Top 50 insurance groups remained relatively stable. Among the movers up was New Jersey's Selective Insurance Group. An 11.7 percent increase in NPW listed the insurer at 43, up from 47 in 2011.
Looking at the list further, Starr International Co. jumps out, having escalated 27 spots to rank 87 in 2012, with a NPW increase of 53.7 percent over 2011. The surge by the Maurice "Hank" Greenberg-led insurance group was the largest of the Top 100 in 2012.
To review the lists of NU's Top 100 P&C performers, click "next."
Editor's Note: To enlarge, click on the chart below.
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