Underwriting. Results 31, Components IMPLIED ANY AND

Transcription

1 Calendar-Accident Year Underwriting Results Using Data Valued as of December 31, 2012 Table of Contents Introduction to Calendar-Accident Year Underwriting Results Types of Data and Dataa Elements Contained in the Calendar-Accident Year Underwriting Results Development Methodology Calendar-Accident Year Underwriting Resultss Based on Experiencee Valued as of December 31, 2012 Components of Expense Ratio for Calendar-Accident Year 2012 NCCI S "CALENDAR-ACCIDENT YEAR UNDERWRITING RESULTS" IS PROVIDED "AS IS". NCCI MAKES NO REPRESEN NTATIONS OR WARRANTIES OF ANY KIND RELATING TO THIS PRODUCT, INCLUDING ANY EXPRESS, STATUTORY OR IMPLIED WARRANTIES INCLUDING THE IMPLIED WARRANTY OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. ADDITIONALLY, NCCI DOES NOT ASSUME ANY RESPONSIBILITY FOR YOUR USE OF, AND FOR ANY AND ALL RESULTS DERIVED OR OBTAINED THROUGH THE USE OF "CALENDAR-ACCIDENT YEAR UNDERWRITING RESULTS". NO EMPLOYEE OR AGENT OF NCCI OR ITS AFFILIATES ARE AUTHORIZED TO MAKE ANY WARRANTIES OF ANY KIND REGARDING "CALENDAR-ACCIDENT YEAR UNDERWR ITING RESULTS". ANY AND ALL RESULTS, CONCLUSIONS, ANALYSIS OR DECISIONS DEVELOPE ED OR DERIVED FROM, ON ACCOUNT OF, OR THROUGH YOUR USE OF "CALENDAR-ACCIDENT YEAR UNDERWRITING RESULTS" ARE YOURS AND NCCI DOES NOT ENDORSE,, APPROVE OR OTHERWISE ACQUIESCE IN YOUR ACTIONS, RESULTS, ANALYSIS, OR DECISIONS, NOR SHALL NCCI HAVE ANY LIABILITY THERETO.

2 Introduction to Calendar-Accident Year Underwriting Results Workers compensation premiums are meant to provide funds to meet two expenditures: benefit costs and operating expenses of the benefitt system. Underwriting results are a measuree of the adequacy of premium funds to cover these expenditures. NCCI expresses the underwriting result as a ratio to net premium. The ratio is the difference between unity and the sum of the loss, expense, and dividend ratios to net premium. It represents the portion of the net premiumm that is left after benefit costs and operating expenses are paid. Negative underwritin g ratios indicate that the premiumm collected was not adequate to pay benefits (losses) and expenses. By definition, underwriting results do not reflect investment income. Underwriting results can be measured on a policy year, calendar year, or calendar- Underwriting Results and Policy Year Underwriting Results. This data excludes underground coal mine, F-classification, large deductible, national defense project, and accident year basis. Financial Call data is used in Calendar-Accident Year excess business. NCCI develops the losses reported by carriers to an estimated ultimate basis. Standard earned premiums at company level are provided, although these premiums are not used in the underwriting results. NCCI produces reports for the policy year and calendar-accident year methods as described below. Policy year experience reflects policies with an effective date occurring in that year from January 1 to December 31. This type of reporting requires that all premium and loss activity, whether payment or reserve adjustment, be applied to the policy year to which the policy effective date corresponds. Thee policy year experience ( ) for the latest 19 reports is contained in Policy Year Underwriting Resultss valued as of December 31, The policy year results provide the most exact matching of premium and losses, but the latest policy year is older than the latest accident year. Calendar-accident year experience reflects premium transactions occurring in that year along with loss experience for claims with accident dates beginning January 1 and ending December 31 of that year. The mostt recent five years ( ) are contained in Calendar-Accident Year Underwriting Results valued as of December 31, Calendar-accident year provides more recent results, but the premiums are not as perfectly matched to lossess since audits and retrospective rating adjustments on prior-year policies are reported in the year that they are made.

3 For Policy Year and Calendar-Accident Year Underwriting Results, in general, each state s losses are developed using a methodology consistent with the state s latest rate filing review. Because different methods are being used, an enclosed Development Methodology exhibit shows which methods are usedd to develop each state s losses. Since the underwriting resultss have not been adjusted to reflect recent rate, loss cost, trend or benefit changes, this informationn by itself does not necessarily indicate future potential results in a state. An insurer is not equired to use this information. The ultimate loss ratios are estimates that change each year as more claims are closed and reserve estimates are updated. Recommendations regarding ultimate historical losss ratios, as well as prospective loss ratios, are not made in this report. For questions related to this report, please contact Tom Sheppard at

4 Types of Data and Data Elements Contained in the Calendar-Accident Year Underwriti ng Results The Calendar-Accident Year Underwriting Results contains 38 states where NCCI collects financial data. Data for Arizona, Colorado, Hawaii, Idaho, Kentucky, Louisiana, Missouri, New Mexico, Oklahoma, Oregon, Rhode Island, Texas, and Utah includes the state fund. Data for the remaining states is for private carriers only. The components of Calendar-Accident Year Underwriting Results are defined below: Standard Earned Company Premium (Column 1) ) From the Calendar-Accident Year Call for Compensation Experience by state, standard earned premium epresents premium reported at the level of rates that the company actually charged the insured prior to the applicationn of adjustments such as retrospective rating plan adjustments, schedule rating, and premium discounts. Net Earned Premium (Column 2) From the Calendar-Accident Year Call for Compensation Experience by state, net (direct) earned premium is reported at company ratee level after the application of adjustments such as retrospective rating plan adjustments, schedule rating, and premiumm discounts. The net earned premium is the final amount paid by the insured. It is important to clarify that the net earned premium iss direct, that is, prior to reinsurance cessionss and assumptions. Indemnity and Medical Losses (Columns 3 and 4) From the Calendar-Accident Year Call for Compensation Experience by state, indemnity and medical lossess have been separately developed to an ultimate basiss using the methodology outlined in the enclosed Developmentt Methodology exhibit. The two methodologies included are paid, and paid plus case: Paid losses are losses that have been paid on given claims. Case reserves are estimates of the remaining amount required to settle particular claims based on the knowledge of those claims at a particular date. Case reserves, when added to the payments on open claims, doo not necessarily reflect the ultimate settlement amount since case reserves are based on knowledge at a particular point in time. The pattern by which losses ( paid, or paid plus case) for an accident period mature from an early reporting to the ultimate cost is referred to as loss development. Expense Ratio (Column 7) Direct defense and cost containment expense (or allocated loss adjustment expense), commission and brokerage expense, and taxes aree calculated by state using data derived from Statutory Page 14 data of the Annual Statement. Adjusting and other expenses (or unallocated losss adjustment expense) ), general expense, and other

5 acquisition expensee are derived from the Insurancee Expense Exhibit using private carrier countrywide data and state-specif fic state fund data. The expense ratio contains a provision for assessments in the tax component of the expense ratio. Therefore, no loss-based assessment adjustment has been applied to the losses. The presentation of the expense ratio (for Calendar-Accident Year 2012) with the five separatee components is shown following the underwriting results. The five components are: Direct Defensee and Cost Containment Expenses Includes defense, litigation, and medical cost containment expenses. Adjusting and Other Expenses Reflects the remaining costs associated with the settlement of claims, such as fees of claim adjusters. Commission and Brokerage Expenses Reflects fees paid by the insurer to agents and brokers who epresent the insured inn placing orders for coverage. Taxes, Licenses, and Fees Represents the insurer s legal obligation to pay premium taxes and various miscellaneous taxess and assessments that vary by state. Taxes are generally levied as percentages s of premium, and assessments can be levied as percentages of premium or losses. General and Other Expenses Reflects costs to the insurer of running internal operations (e.g., rent, salaries), general activitiess (e.g., administration, payroll, audits, boards and bureaus funding, and inspections) and other acquisition costss (e.g., advertising and premium collection expenses). Dividend Ratio (Column 8) The dividend ratio reflects dividends as a percentage of earned premium based on individual state information from Statutory Page 14 data of the Annual Statement for Calendar Years 2008 through 2012.

6 Development Methodology STATE Alabamaa Alaska Arizona Arkansas Colorado Connecticut District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Mississippi Missouri Montanaa Nebraska Nevada New Hampshire New Mexico North Carolina Oklahoma Oregon Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia West Virginia METHOD Weighted Average: 25% Paidd and 75% Paid + Case to a 19th Paid + Case to a 19th Paid to a 19 th Paid + Case to a 19 th Paid + Case to a 19 th Averagee of Paid and Paid + Case to a 16th, Paid + Case 17th to 19th Paid to a 19 th Paid to a 19th Paid to a 19th Paid to a 19th Paid to an 12th for private carriers, Paid to a 19th for the state fund Paid to a 19th Paid to a 19th Paid to a 19th Paid + Case to a 19th Paid + Case to a 19th Averagee of Paid and Paid + Case to a 14th Paid to a 19th Paid + Case to a 19th Averagee of Paid and Paid + Case to a 10th

7 Development factors are based on a subset or combination of the data valued as of 12/31/2007, 12/31/ /2008, 12/31/2009, 12/ /31/2010, 12/31/2011,, and 12/31/2012. To be as consistent as possible with NCCI s filing process, each state s losses are developed using a methodology consistent with the state s latest rate review. In general, these calculations assume that a two- orr three-year average of link ratios as well as a particular 19th-to-ultimate loss development methodology is appropriate. Other assumptions may be made regarding loss development. Methodology Key For the purposes of this document, the developmen nt methodology refers to the basis of losses which are then developed to ultimate. Paid to a 19th Paid losses are used as the experience base from 1st through 19th. The paid losses are then developed to an ultimate report. Paid + Case to a 19th The sum of paid losses and case reserves is used as the experience base from 1st through 19th report. The sum of paid losses and case reservess is then developed to ultimate. Paid to an Nth and Paid + Case to 19th Paid losses are used as the experience base from 1st through Nth report. The paid losses are then developed to an ultimate report. The sum of paid lossess and case reserves are used as the experience base from (N+1)th through 19th. The sum of paid losses and case reserves is then developed to ultimate. Please note that some states use variations of the development methods described above.

8 Alabama Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 288,969, ,146,054 42,917, ,998, ,916, (2nd Report) 308,241, ,353,224 51,210, ,316, ,527, (3rd Report) 298,688, ,519,269 50,781, ,137, ,919, (4th Report) 295,055, ,841,021 48,123, ,722, ,845, (5th Report) 350,728, ,960,975 46,518, ,284, ,803, Alaska Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 287,115, ,618,940 38,932, ,080, ,013, (2nd Report) 275,878, ,901,935 39,153, ,482, ,635, (3rd Report) 264,739, ,028,614 39,381, ,475, ,856, (4th Report) 293,630, ,715,824 38,758,248 91,307, ,065, (5th Report) 324,249, ,518,683 43,908, ,137, ,046, Arizona Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 647,816, ,985, ,651, ,282, ,933, (2nd Report) 581,940, ,942, ,042, ,878, ,921, (3rd Report) 579,520, ,111, ,780, ,974, ,754, (4th Report) 686,437, ,081, ,513, ,789, ,303, (5th Report) 803,634, ,453, ,798, ,263, ,062, Arkansas Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 241,542, ,535,092 36,678,786 75,780, ,459, (2nd Report) 232,685, ,324,527 41,018,273 73,004, ,022, (3rd Report) 219,624, ,853,057 37,856,127 73,224, ,080, (4th Report) 246,013, ,220,927 37,488,420 63,673, ,161, (5th Report) 280,414, ,822,347 45,336,459 76,617, ,954,

9 Colorado Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 705,228, ,993, ,477, ,396, ,874, (2nd Report) 632,351, ,622, ,234, ,199, ,434, (3rd Report) 605,222, ,751, ,155, ,698, ,853, (4th Report) 741,180, ,029, ,000, ,311, ,311, (5th Report) 911,262, ,843, ,457, ,049, ,507, Connecticut Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 742,464, ,081, ,548, ,525, ,073, (2nd Report) 689,636, ,333, ,421, ,591, ,012, (3rd Report) 618,185, ,595, ,305, ,163, ,469, (4th Report) 646,850, ,126, ,923, ,761, ,685, (5th Report) 679,151, ,190, ,285, ,543, ,828, District of Columbia Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 124,793, ,980,710 44,212,654 27,750,816 71,963, (2nd Report) 108,459,722 92,189,363 38,368,314 21,701,301 60,069, (3rd Report) 108,171, ,897,590 42,416,873 21,246,537 63,663, (4th Report) 111,686, ,215,559 38,112,199 21,513,258 59,625, (5th Report) 136,618, ,935,797 41,096,583 21,807,662 62,904, Florida Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 1,908,505,953 1,748,283, ,873, ,420,021 1,189,293, (2nd Report) 1,574,688,671 1,494,906, ,960, ,268,584 1,102,229, (3rd Report) 1,487,320,604 1,391,700, ,925, ,136,990 1,064,062, (4th Report) 1,730,340,466 1,609,257, ,737, ,929,725 1,003,667, (5th Report) 2,374,397,710 2,140,400, ,170, ,780,801 1,128,951,

10 Georgia Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 1,146,222, ,976, ,530, ,860, ,390, (2nd Report) 1,076,743, ,164, ,374, ,714, ,089, (3rd Report) 994,811, ,709, ,096, ,446, ,542, (4th Report) 1,123,278, ,380, ,527, ,932, ,460, (5th Report) 1,262,504,604 1,082,204, ,213, ,714, ,928, Hawaii Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 186,809, ,335,479 57,179,752 50,935, ,115, (2nd Report) 178,994, ,682,355 59,600,687 55,703, ,304, (3rd Report) 181,604, ,256,875 60,955,710 51,081, ,037, (4th Report) 210,658, ,546,385 61,292,731 50,162, ,455, (5th Report) 282,651, ,638,141 69,379,870 53,531, ,911, Idaho Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 305,041, ,043,798 70,275, ,795, ,070, (2nd Report) 288,620, ,066,375 65,604, ,591, ,196, (3rd Report) 275,425, ,843,992 65,442, ,981, ,423, (4th Report) 288,337, ,399,046 68,692, ,421, ,113, (5th Report) 346,266, ,506,446 79,959, ,133, ,093, Illinois Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 2,760,195,511 2,220,281, ,320, ,748,133 1,422,069, (2nd Report) 2,785,155,244 2,170,384, ,853, ,527,148 1,565,380, (3rd Report) 2,656,921,751 2,027,669, ,632, ,702,218 1,654,334, (4th Report) 2,787,136,314 2,119,400, ,683, ,703,758 1,666,387, (5th Report) 2,999,399,745 2,290,934,285 1,025,192, ,034,296 1,947,226,

11 Indiana Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 812,530, ,967, ,335, ,282, ,617, (2nd Report) 741,537, ,220, ,794, ,445, ,240, (3rd Report) 674,217, ,538, ,068, ,983, ,051, (4th Report) 678,703, ,610, ,717, ,862, ,579, (5th Report) 778,380, ,625, ,100, ,514, ,614, Iowa Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 670,973, ,456, ,749, ,076, ,825, (2nd Report) 607,957, ,932, ,047, ,634, ,681, (3rd Report) 552,987, ,803, ,816, ,928, ,744, (4th Report) 562,886, ,677, ,406, ,134, ,541, (5th Report) 574,565, ,255, ,448, ,378, ,826, Kansas Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 436,233, ,496,824 84,560, ,381, ,942, (2nd Report) 403,307, ,390, ,614, ,247, ,862, (3rd Report) 388,507, ,002, ,908, ,108, ,016, (4th Report) 420,503, ,908, ,390, ,892, ,283, (5th Report) 414,021, ,491,396 94,497, ,373, ,870, Kentucky Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 499,030, ,361, ,867, ,525, ,392, (2nd Report) 531,821, ,148, ,070, ,796, ,867, (3rd Report) 543,130, ,729, ,027, ,962, ,989, (4th Report) 558,299, ,854, ,739, ,825, ,565, (5th Report) 612,618, ,292, ,754, ,207, ,962,

12 Louisiana Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 722,740, ,788, ,900, ,102, ,003, (2nd Report) 674,525, ,957, ,523, ,103, ,626, (3rd Report) 662,757, ,455, ,768, ,695, ,464, (4th Report) 764,182, ,997, ,649, ,875, ,525, (5th Report) 831,331, ,189, ,288, ,198, ,487, Maine Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 231,801, ,230,311 68,042,000 67,681, ,723, (2nd Report) 242,063, ,718,074 64,582,482 69,402, ,985, (3rd Report) 235,330, ,392,988 59,769,884 74,281, ,051, (4th Report) 228,090, ,339,830 59,231,317 71,290, ,521, (5th Report) 272,284, ,037,423 70,083,652 77,633, ,717, Maryland Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 620,563, ,859, ,084, ,563, ,648, (2nd Report) 569,341, ,043, ,912, ,671, ,584, (3rd Report) 534,915, ,511, ,260, ,035, ,296, (4th Report) 556,401, ,557, ,099, ,335, ,434, (5th Report) 668,721, ,262, ,638, ,458, ,097, Mississippi Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 285,834, ,701,515 67,904,402 98,397, ,302, (2nd Report) 275,737, ,994,424 72,682, ,575, ,258, (3rd Report) 274,128, ,017,154 72,325, ,131, ,457, (4th Report) 312,124, ,371,066 60,768, ,107, ,875, (5th Report) 330,027, ,097,502 58,546,542 88,990, ,536,

13 Missouri Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 781,978, ,487, ,157, ,984, ,142, (2nd Report) 761,288, ,684, ,039, ,087, ,126, (3rd Report) 748,746, ,123, ,530, ,879, ,409, (4th Report) 850,706, ,984, ,293, ,755, ,049, (5th Report) 971,409, ,857, ,015, ,511, ,526, Montana Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 296,288, ,011,876 64,053, ,720, ,773, (2nd Report) 313,597, ,465,658 61,448, ,346, ,794, (3rd Report) 324,049, ,837,290 65,471, ,454, ,925, (4th Report) 341,988, ,466,163 61,753, ,641, ,395, * * (5th Report) 377,811, ,964,341 83,184, ,214, ,398, * * Nebraska Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 354,751, ,911,369 75,350, ,032, ,383, (2nd Report) 332,923, ,976,398 67,065, ,674, ,739, (3rd Report) 335,485, ,361,973 74,172, ,579, ,751, (4th Report) 353,695, ,827,312 72,291, ,820, ,112, (5th Report) 368,923, ,290,878 74,262, ,121, ,383, Nevada Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 275,722, ,647,010 88,280, ,001, ,282, (2nd Report) 277,804, ,010,614 83,031,924 98,873, ,905, (3rd Report) 318,996, ,199,506 84,115,997 94,490, ,606, (4th Report) 358,713, ,515, ,299, ,551, ,850, (5th Report) 437,759, ,717, ,496, ,522, ,019, * Reflects private carrier data only

14 New Hampshire Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 261,233, ,655,626 39,193, ,545, ,738, (2nd Report) 246,347, ,406,552 42,357, ,339, ,697, (3rd Report) 238,298, ,564,159 40,371, ,029, ,401, (4th Report) 252,717, ,759,851 41,400, ,281, ,681, (5th Report) 280,235, ,690,554 46,498, ,254, ,753, New Mexico Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 254,851, ,648,340 60,069, ,251, ,321, (2nd Report) 234,045, ,586,297 58,536,863 98,197, ,734, (3rd Report) 230,203, ,425,320 60,953, ,953, ,906, (4th Report) 257,076, ,196,387 55,426, ,636, ,062, (5th Report) 285,509, ,917,356 61,964, ,894, ,858, North Carolina Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 1,333,444,091 1,095,168, ,751, ,864, ,616, (2nd Report) 1,261,292,024 1,001,866, ,400, ,410, ,811, (3rd Report) 1,162,512, ,557, ,316, ,821, ,137, (4th Report) 1,361,813,310 1,084,059, ,472, ,619, ,091, (5th Report) 1,625,965,972 1,308,389, ,397, ,223, ,620, Oklahoma Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 918,784, ,443, ,116, ,931, ,047, (2nd Report) 804,747, ,621, ,573, ,182, ,755, (3rd Report) 745,226, ,745, ,419, ,498, ,917, (4th Report) 756,792, ,498, ,599, ,032, ,631, (5th Report) 756,323, ,824, ,723, ,397, ,121,

15 Oregon Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 666,609, ,703, ,700, ,542, ,242, (2nd Report) 645,135, ,493, ,269, ,983, ,253, (3rd Report) 568,501, ,500, ,285, ,345, ,630, (4th Report) 654,686, ,015, ,671, ,669, ,341, (5th Report) 760,279, ,562, ,656, ,309, ,965, Rhode Island Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 185,892, ,351,620 74,551,405 37,980, ,531, (2nd Report) 172,875, ,741,284 81,547,727 41,137, ,684, (3rd Report) 170,959, ,907,980 72,411,853 39,080, ,492, (4th Report) 186,152, ,818,439 78,427,272 40,871, ,298, (5th Report) 215,636, ,865,294 74,838,919 39,016, ,855, South Carolina Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 617,715, ,074, ,927, ,744, ,672, (2nd Report) 602,588, ,718, ,604, ,316, ,921, (3rd Report) 566,189, ,353, ,500, ,636, ,137, (4th Report) 646,234, ,629, ,069, ,628, ,698, (5th Report) 760,538, ,181, ,548, ,815, ,363, South Dakota Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 177,755, ,403,211 23,426,750 60,921,804 84,348, (2nd Report) 165,924, ,688,897 30,113,851 72,811, ,925, (3rd Report) 151,237, ,158,539 26,012,810 59,510,314 85,523, (4th Report) 151,827, ,667,769 25,567,757 64,012,606 89,580, (5th Report) 149,845, ,136,564 26,750,135 74,076, ,826,

16 Tennessee Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 815,843, ,450, ,633, ,192, ,825, (2nd Report) 740,121, ,903, ,953, ,239, ,193, (3rd Report) 704,364, ,707, ,191, ,037, ,229, (4th Report) 753,541, ,915, ,496, ,415, ,912, (5th Report) 926,870, ,726, ,891, ,445, ,336, Texas Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 2,771,992,008 2,032,417, ,894, ,697,098 1,031,591, (2nd Report) 2,513,445,345 1,796,837, ,943, ,411, ,355, (3rd Report) 2,334,790,935 1,727,625, ,857, ,788, ,646, (4th Report) 2,546,429,905 1,856,962, ,233, ,989, ,223, (5th Report) 2,946,510,214 2,165,543, ,641, ,394, ,036, Utah Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 374,268, ,523,138 55,821, ,168, ,990, (2nd Report) 342,724, ,016,679 52,761, ,250, ,011, (3rd Report) 333,341, ,542,913 51,659, ,144, ,803, (4th Report) 383,812, ,276,435 57,071, ,948, ,020, (5th Report) 496,161, ,087,005 69,198, ,652, ,851, Vermont Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 176,122, ,976,640 53,626,222 62,912, ,538, (2nd Report) 160,849, ,390,271 53,206,817 63,324, ,531, (3rd Report) 159,127, ,271,262 46,839,411 53,619, ,458, (4th Report) 175,866, ,351,703 53,297,161 56,389, ,686, (5th Report) 203,034, ,536,173 51,245,636 54,682, ,928,

17 Virginia Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 759,853, ,231, ,361, ,099, ,460, (2nd Report) 753,582, ,455, ,836, ,067, ,904, (3rd Report) 717,745, ,288, ,081, ,286, ,368, (4th Report) 756,715, ,307, ,963, ,362, ,325, (5th Report) 819,702, ,814, ,948, ,806, ,754, West Virginia Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 290,761, ,246,368 56,091,185 72,544, ,635, (2nd Report) 305,744, ,483,987 69,158,077 90,975, ,133, (3rd Report) 301,595, ,661,796 77,751,566 87,427, ,179, Total Excluding West Virginia Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 24,647,522,436 20,804,232,125 5,806,959,919 8,283,176,256 14,090,136, (2nd Report) 23,108,982,216 19,241,141,669 5,904,763,658 8,209,511,794 14,114,275, (3rd Report) 21,965,988,865 18,362,559,683 5,820,865,803 7,976,552,102 13,797,417, (4th Report) 24,030,567,693 19,954,786,514 5,786,191,196 7,605,181,489 13,391,372, (5th Report) 27,615,745,163 23,025,762,913 6,585,938,698 8,397,993,653 14,983,932, Total Including West Virginia Premium Premium Losses Losses Losses (5)/(2) Ratio Ratio ((6)+(7)+(8)) 2012 (1st Report) 24,938,284,104 21,074,478,493 5,863,051,104 8,355,720,926 14,218,772, (2nd Report) 23,414,726,683 19,527,625,656 5,973,921,735 8,300,487,071 14,274,408, (3rd Report) 22,267,584,495 18,646,221,479 5,898,617,369 8,063,979,870 13,962,597,

18 Components of Expense Ratio for Calendar-Accident Year 2012 (1) (2) (3) (4) (5) (6) Direct Defense General and and Cost Adjusting and Commission Taxes, Other Containment Other and Brokerage Licenses and Acquisition Total Expense Ratio (sum of columns (1) to State Alabama Expense 4.7% Expenses 4.6% Expenses 8.8% Fees 5.1% Expenses 11.8% (5)) 35.0% Alaska 6.2% 5.1% 6.7% 1.4% 11.8% 31.2% Arizona 9.3% 7.4% 6.9% 5.7% 14.4% 43.7% Arkansas 5.4% 4.5% 8.1% 6.3% 11.8% 36.1% Colorado 3.8% 7.0% 11.7% 3.2% 12.2% 37.9% Connecticut 7.5% 6.4% 8.4% 2.7% 11.8% 36.8% District of Columbia 4.4% 3.6% 6.9% 5.5% 11.8% 32.2% Florida 7.4% 4.7% 9.2% 4.4% 11.8% 37.5% Georgia 7.9% 5.3% 8.8% 9.8% 11.8% 43.6% Hawaii 5.0% 5.5% 7.6% 6.2% 13.0% 37.3% Idaho 5.0% 6.8% 6.4% 3.8% 10.5% 32.5% Illinois 7.5% 6.1% 7.8% 2.0% 11.8% 35.2% Indiana 5.1% 5.5% 8.0% 1.8% 11.8% 32.2% Iowa 5.2% 5.6% 7.4% 2.0% 11.8% 32.0% Kansas 6.1% 5.0% 8.2% 3.4% 11.8% 34.5% Kentucky 7.5% 7.4% 9.3% 1.4% 11.6% 37.2% Louisiana 7.8% 4.6% 8.8% 6.8% 11.6% 39.6% Maine 4.8% 4.8% 7.7% 3.3% 11.8% 32.4% Maryland 4.9% 5.7% 7.7% 4.5% 11.8% 34.6% Mississippi 6.6% 5.0% 8.8% 4.1% 11.8% 36.3% Missouri 7.5% 5.8% 8.1% 2.0% 13.0% 36.4% Montana 3.7% 6.6% 6.4% 1.4% 12.8% 30.9% Nebraska 4.1% 5.2% 7.2% 1.9% 11.8% 30.2% Nevada 7.2% 2.9% 10.1% 5.5% 11.8% 37.5% New Hampshire 5.2% 5.0% 8.9% 7.7% 11.8% 38.6% New Mexico 6.5% 8.4% 8.9% 3.5% 12.1% 39.4% North Carolina 6.6% 6.2% 7.9% 2.8% 11.8% 35.3% Oklahoma 7.2% 5.4% 6.9% 5.1% 11.0% 35.6% Oregon 5.1% 13.7% 5.7% 1.0% 12.4% 37.9% Rhode Island 4.7% 10.3% 8.9% 10.1% 14.5% 48.5% South Carolina 7.9% 5.1% 7.9% 9.4% 11.8% 42.1% South Dakota 4.5% 4.6% 7.4% 3.7% 11.8% 32.0% Tennessee 6.3% 5.3% 7.9% 4.2% 11.8% 35.5% Texas 5.3% 3.7% 9.5% 4.2% 10.8% 33.5% Utah 7.7% 6.7% 5.9% 3.7% 14.7% 38.7% Vermont 4.7% 5.0% 8.5% 2.6% 11.8% 32.6% Virginia 6.0% 5.7% 7.7% 2.9% 11.8% 34.1% West Virginia 13.6% 3.8% 8.4% 1.8% 11.8% 39.4%