2015 Market Share. Insurers. The Texas premium volume and loss. in Texas. for. By Regina Anderson IIAT Manager of Technical Services

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1 By Regina Anderson IIAT Manager of Technical Services Insurers for in Texas The Texas premium volume and loss data for tells a story of slower premium growth, stable market share percentages and profitable loss ratios. The economy in Texas continues to grow, compared to the numbers seen in the recession of a couple of years ago, and insurance companies and their agents are hanging on for the ride. Take a look at these premium volume numbers to see if your company or agency kept up the pace and took your share. The total written premium volume for all lines of insurance in Texas was $48.1 billion in, compared to $46.5 billion in 2014, an increase of 3.3 percent. With the exception of workers compensation, which decreased 3.6 percent, all other lines of insurance featured in this report showed a percentage gain from 2014 to. The increases ranged from 1.7 percent for homeowners to 7.3 percent for personal auto. personal lines premium volume increased 5.5 percent. Personal lines loss ratios increased. Homeowners climbed by 7.1 percent, but remained profitable. Personal auto jumped by 6.5 percent and was higher than the national average. Commercial lines fared better with loss ratio decreases in workers compensation and commercial multi-peril. However, the loss ratio for commercial auto deteriorated by 4.7 percent. Here are the highlights in summary for : The aggregate loss ratio for all Texas companies for all lines of business was 60.4 percent (compared to 54.4 percent in 2014). The countrywide aggregate loss ratio was 57.2 percent (up slightly from 56.1 percent in ). Texas policyholders spent $48.1 billion on insurance premiums for all lines of insurance (up from $46.5 billion in 2014), which is 8.3 percent of the national premium volume of $577.6 billion (up from $555.2 billion in 2014). Texas premiums grew by 3.4 percent while national premiums increased 4.0 percent. Personal lines market share for Texas independent agency companies in increased slightly, from 26.7 percent in 2014 to 27.2 percent in. share for independent agency companies has remained virtually unchanged for 11 years, ranging from a low of 25.6 percent in 2008 to a high of 27.4 percent in Of course, each percentage point represents about $250 million in premium lost to direct writer companies or gained by independent agencies in any given year. UNDERSTATED MARKET SHARE A.M. Best reports aggregate data for each company group and categorizes each company group as a Direct Writer or Agency based on the source of the majority of its premium volume. For example, premium for the following company groups are reported in the Direct Writer category even though a significant (but not majority) percentage of premium comes from independent agencies: Allstate, Auto Club AAA, Berkshire Hathaway, Farmers, Liberty Mutual, MetLife and Nationwide. This is offset somewhat by Progressive and Hartford, reported in the Agency category even though a percentage of those company group premiums come from non-independent agent sources or consumers. For this reason, the percentages of independent agency personal lines market share may be understated. MARKET SHARE OF DIRECT WRITERS & AGENCY COMPANIES Texas Personal Lines Insurance Sales (Homeowners and Personal Auto) Agency Companies Direct Writers $16,637 $4, % $17,094 $4, % $18,018 $18,758 $4, % $4, % $18,977 $4, % $19,632 $5, % $20,626 $5, % $22,458 $5, % $24,175 $6, % $25,507 $6, % volume by year; dollar figures in millions Compiled from Best DataBase Services. Experience by state for homeowners, private passenger auto liabilty, no fault and physical damage. $11,808 $12,150 $12,511 $13,406 $13,934 $14,071 $14,343 $15,075 $16,583 $17,727 $18, % 73% $ % 74.3% 74.1% 73.1% 73.1% 73.8% 73.3% 72.6%

2 Personal Auto Personal Auto Homeowners Year $7, % 50.2% 2014 $7, % 49.6% 2013 $7, % 46.4% 2012 $6, % 58.9% 2011 $6, % 75.5% Homeowners Five-Year s Year $17, % 68.7% 2014 $16, % 66.0% 2013 $15, % 65.6% 2012 $14, % 66.4% 2011 $13, % 67.3% 2014 Direct Writers $11, % $12, % Agency Companies $ % $5, % PERSONAL AUTO The top 20 companies in personal auto stayed almost the same in with the exception of the addition of AmTrust up from their 2014 rank of 72 into the 14th spot and knocking out Republic. The top 5 companies State Farm, Allstate, Farmers, Berkshire Hathaway and Progressive continue to dominate personal auto with 58.2 percent of the market share for, which is the same market share these top 5 had in Independent agency companies gained little ground against direct writer companies, with 28.8 percent in compared to 28.7 percent in The personal auto loss ratio of 72.1 percent increased from 65.6 percent in 2014 and slightly higher than the national average loss ratio of 68.7 percent. Five-Year s 2014 Direct Writers $6, % $6, % Agency Companies $1, % $1, % Top 20 Personal Auto Carriers in Texas - Top 20 Homeowners Carriers in Texas 1 State Farm 1 1, Allstate 2 1, Farmers USAA Liberty Mutual Travelers Nationwide Texas Farm Bureau Progressive ACE INA Amica Auto Club (AAA) MetLife Hartford Texas FAIR Plan Homeowners of America QBE National Lloyds AmTrust Universal State Farm 1 3, Allstate 2 2, Berkshire Hathaway (GEICO) 4 1, Farmers 3 1, Progressive 5 1, USAA 6 1, Home State Texas Farm Bureau Liberty Mutual Nationwide Titus Old American Loya AmTrust Auto Club (AAA) ACCC MetLife Germania Amica Kemper

3 Commercial Multiperil Five-Year s Year $2, % 45.4% 2014 $2, % 49.2% 2013 $2, % 45.4% 2012 $2, % 56.7% 2011 $2, % 62.8% HOMEOWNERS The homeowners loss ratio of 53.3 percent reflects a relatively quiet year weather-wise. The rest of the country also remained relatively catastrophe-free, producing a countrywide loss ratio of 50.2 percent in. The top 5 companies State Farm, Allstate, Farmers, USAA and Liberty Mutual continue to dominate homeowners with 63.3 percent of the market share. The Texas Fair Plan Association maintained its position at #15 with a slight decrease in written premium from $92.9 million in 2014 to $92.5 million in. The market share for independent agency companies had a slight gain from 22.4 percent in 2014 to 23.9 percent in. COMMERCIAL MULTIPERIL The commercial multiperil loss ratio was a profitable 48.1 percent, marking three profitable years in a row, reflecting fewer Texas catastrophe losses. New entries to the top 20 in included QBE, Central and Argo knocking out Chubb, State National and IAT. COMMERCIAL AUTO The commercial auto loss ratio was at 70.7 percent. This marks the fourth year in a row that the loss ratio was above 60 percent and less profitable than the countrywide loss ratio. There were two new companies in the top 20 AmTrust and State National. Commercial Auto Five-Year s Year $2, % 65.9% 2014 $2, % 64.1% 2013 $2, % 62.9% 2012 $2, % 63.8% 2011 $2, % 59.6% Top 20 Commercial Multiperil Carriers in Texas 1 Progressive AIG Travelers Zurich Berkshire Hathaway Hallmark Nationwide Liberty Mutual Old Republic ACE INA AmTrust Farmers State Farm State National Hartford W.R. Berkley QBE United Fire Allstate Sentry Travelers Hartford Nationwide Liberty Mutual ACE INA Farmers CNA Philadelphia/Tokio State Farm AIG Zurich Allstate Hanover QBE Church Mutual Cincinnati W.R. Berkley GuideOne Central Argo Top 20 Commercial Auto Carriers in Texas

4 Workers Compensation Five-Year s Year $2, % 58.5% 2014 $2, % 60.5% 2013 $2, % 59.8% 2012 $2, % 67.9% 2011 $2, % 65.2% WORKERS COMPENSATION Workers compensation premiums decreased in down 3.6 percent over This marks the first decrease in workers compensation premium since The workers compensation loss ratio of 44.2 percent continued a 11 year streak of profitable years for workers compensation in Texas. This is a remarkable achievement compared to the countrywide loss ratio, which until this year in hadn t dropped below 60 percent since Texas Mutual Insurance continued to dominate the Texas market in with written premium of just under $1.1 billion, representing a 39.7 percent market share, compared to 40.1 percent in That was a decrease of 4.7 percent in written premium, compared to the overall statewide decrease of 3.6 percent. Nineteen other companies picked up the crumbs to comprise the top 20, adding Starr and Great American to the top 20, but the closest competitor was Travelers with written premium of only $192.3 million. THE OUTLOOK FOR 2016 The weather has not cooperated during 2016 with major hail storms affecting various parts of the state. Insurance companies are already reacting with recent rate filings seeking homeowners increases between 8.5 percent and 9.3 percent. Personal auto rate increases should be expected as well. The Texas economy is still reacting to the slowdown in the oil and gas sector. Written premium growth will be a challenge. Top 20 Workers Compensation Carriers in Texas 1 Texas Mutual 1 1, Travelers Liberty Mutual AIG Zurich Hartford ACE INA Service Lloyds Old Republic CNA Amerisure AmTrust Accident Fund Fairfax Financial W.R. Berkley Starr Berkshire Hathaway Great American Sentry HIIG WHERE THE DATA COMES FROM We are often asked the source of the data used for this annual market share report, because our information differs from the data available from other sources and from information provided by insurers to their staff and agents. Each year, an A.M. Best subsidiary, Best Data Services, publishes the State/Line Report. The source data for this report is found on basic page 26 (statutory page 14) (Exhibit of s and es) of each insurer s sworn annual statement, prepared according to certain statutory requirements in a format dictated by the National Association of Insurance Commissioners, and filed with the Texas Department of Insurance. The resulting data differs from other sources because of the statutory nature of the report.

TOP 50 Top 50 Companies 2014 2014 1 State Farm 1 5,229.1 11.5 10.9 2 Allstate 2 3,295.0 6.5 6.8 3 Farmers 3 3,014.1 4.5 6.3 4 USAA 5 2,249.9 4.7 4.7 5 Liberty Mutual 4 2,217.0 4.5 4.

5 TOP 50 Top 50 Companies State Farm 1 5, Allstate 2 3, Farmers 3 3, USAA 5 2, Liberty Mutual 4 2, Berkshire Hathaway 7 2, Progressive 6 2, AIG 8 1, Travelers 9 1, ACE INA 15 1, Nationwide 10 1, Texas Farm Bureau 12 1, Texas Mutual 11 1, Zurich 13 1, AmTrust CNA Home State Hartford Philadelphia/ Tokio Germania W.R. Berkley XL CaitlinAmerica Old American Assurant Endurance Titus Auto Club (AAA) QBE Great American Allianz MetLife Old Republic Loya Amica Markel Fairfax Financial FM Global Hallmark Munich-American ACCC Starr International Hanover State National Arch Kemper Sentry State Auto Swiss Re Hochheim United Fire & Casualty

in Texas for By David Surles, CPCU, RPLU, AAI Regina Anderson IIAT Manager of Technical Services The Texas premium volume and loss Contributing Author

in Texas for By David Surles, CPCU, RPLU, AAI Regina Anderson IIAT Manager of Technical Services The Texas premium volume and loss Contributing Author Insurers for in Texas By David Surles, CPCU, RPLU, AAI Contributing Author Regina Anderson IIAT Manager of Technical Services The Texas premium volume and loss data for tells a story of rising premiums,