results. Workers Compensation continues to be extremely profitable.

By Regina Anderson IIAT Manager of Technical Services Insurers for in Texas T he Texas premium volume and loss data for tells a story of slower premium growth, and climbing loss ratios. The total written premium volume for all lines of insurance in Texas was $53.4 billion in, compared to $50.0 billion in, an increase of 6.8 percent. With the exception of workers compensation, which decreased slightly, and all other lines of insurance featured in this report showed a percentage gain from to. The increases ranged from 4.3 percent for homeowners to 10.4 percent for personal auto. personal lines premium volume increased 8.6 percent. The weather was a major factor in property loss ratios for the second year in a row with the Homeowners loss ratio again over 80.0%. The Commercial Multi-Peril loss ratio climbed to 105.4 marking the worst performance in the past 6 years. Both personal and business auto were unprofitable as well. The Personal Auto of 76.6% marked the third straight year the loss ratio has exceeded 70.0%. The Business Auto loss ratio of finished at 82.1% marking the fourth year of deteriorating results. Workers Compensation continues to be extremely profitable. Here are the highlights in summary for : The aggregate loss ratio for all Texas companies for all lines of business was 94.1 percent (compared to 74.4 percent in ). The countrywide aggregate loss ratio was 65.0 percent (up from 60.3 percent in ). Texas policyholders spent $53.4 billion on insurance premiums for all lines of insurance (up from $50 billion in ), with the national premium volume of $627 billion. Personal lines market share for Texas independent agency companies in increased slightly, from 26.6 percent in to 27.1 percent in. share for independent agency companies has remained virtually unchanged for 10 years, ranging from a low of 25.6 percent in 2008 to a high of 27.4 percent in 2015. PERSONAL AUTO The top 20 companies in personal auto stayed almost the same in with the exception of the addition of Consumers County Mutual new to the list along with American 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. Access Casualty. Knocking out Titus and Alinsco. The top 5 companies State Farm, Berkshire Hathaway, Allstate, Progressive, MARKET SHARE OF DIRECT WRITERS & AGENCY COMPANIES Texas Personal Lines Insurance Sales 2008- (Homeowners and Personal Auto) $18,018 $4,612 25.6% $18,758 $18,977 $4,824 25.7% $4,906 25.9% $19,632 $20,626 $5,289 26.9% $5,551 26.9% $22,458 $5,875 26.2% $24,175 $6,448 26.7% $25,507 $6,996 27.4% $27,656 $7,351 26.6.% $30,022 $8,112 27.1% Agency Companies Direct Writers volume by year; dollar figures in millions Compiled from Best DataBase Services. Experience by state for homeowners, private passenger auto liabilty, $12,511 $13,406 $13,934 $14,071 $14,343 $15,075 $16,583 $17,727 $18,541 no fault and 72.6 physical $73.2 74.4% 74.3% 74.1% 73.1% 73.1% 73.8% 73.3% 72.6% damage. $20,305 73.4% $21,911 72.9% 2008 2009 2010 2011 2012 2013 2014 2015

Personal Auto Personal Auto Millions Homeowners $8,850.1 80.3% 73.5% $8,474.8 87.0% 52.6% 2015 $7,994.1 53.3% 50.2% 2014 $7,860.7 46.2% 49.6% 2013 $7,252.3 44.8% 46.4% Homeowners Millions $21,172.4 76.6% 68.8% $19,180.8 79.8% 72.0% 2015 $17,512.5 72.1% 68.7% 2014 $16,314.5 65.6% 66.0% 2013 $15,205.5 64.3% 65.6% Direct Writers $15,359.7 72.5% $13,876.8 72.3% Agency Companies $5,812.7 27.5% $5,304.0 27.7% and Farmers continue to dominate personal auto with 58.8 percent of the market share for which is just a slight increase from. Independent agency companies lost ground against direct writer companies with a 27.5 percent market share as compared to 27.7% in. The personal auto loss ratio of 76.6 percent decreased from 79.8 percent in and was higher than the national average loss ratio of 68.8 percent. HOMEOWNERS The homeowners loss ratio of 80.3 percent reflects a decrease from 87.0 percent in. The rest of the country produced a countrywide loss ratio of 73.5 percent in. The top 5 companies State Farm, Allstate, Farmers, Direct Writers $6,551.2 74.0% $6,428.0 75.8% Agency Companies $2,299.0 26.0% $2,046.8 24.2% Top 20 Personal Auto Carriers in Texas - Top 20 Homeowners Carriers in Texas 1 State Farm 1 1837.4 20.8 66.9 2 Allstate 2 1126.2 12.7 66.0 3 Farmers 3 952.4 10.8 77.1 4 USAA 4 850.4 9.6 87.8 5 Liberty Mutual 5 710.5 8.0 83.3 6 Travelers 6 341.7 3.9 77.3 7 Nationwide 7 256.1 2.9 91.4 8 Texas Farm Bureau 8 231.4 2.6 91.5 9 Progressive 9 210.8 2.4 78.6 10 Chubb INA 10 182.0 2.1 176.1 11 Amica 11 165.8 1.9 85.6 12 Auto Club (AAA) 12 129.5 1.5 75.5 13 Homeowners of America 14 112.8 1.3 64.7 14 United Insurance 16 105.1 1.2 72.5 15 MetLife 13 98.3 1.1 99.6 16 QBE 18 82.5 0.9 155.7 17 Hartford 15 81.3 0.9 84.2 18 Texas Fair Plan 17 74.2 0.8 60.5 19 GeoVera 28 65.0 0.7 89.5 20 Markel 63 62.5 0.7 83.6 1 State Farm 1 3563.1 16.8 78.3 2 Berkshire Hathaway (GEICO) 3 2637.5 12.5 88.2 3 Allstate Insurance Group 2 2362.6 11.2 66.2 4 Progressive 5 2041.3 9.6 68.9 5 Farmers 4 1842.7 8.7 66.1 6 USAA 6 1712.9 8.1 88.3 7 Liberty Mutual 7 1195.7 5.6 84.0 8 Texas Farm Bureau 8 693.0 3.3 77.3 9 Consumers County Mutual 541.8 2.6 86.5 10 Nationwide 9 473.3 2.2 65.5 11 Old American 12 378.8 1.8 75.9 12 Home State 11 298.1 1.4 77.1 13 Auto Club (AAA) 14 297.6 1.4 88.8 14 Loya 13 234.8 1.1 53.8 15 AmTrust 15 232.5 1.1 82.6 16 ACCC 16 220.6 1.0 55.4 17 Germania 18 199.8 0.9 72.0 18 American Access Casualty 199.7 0.9 68.5 19 MetLife 17 187.8 0.9 75.9 20 Amica 20 173.5 0.8 113.8

Commercial Multiperil $2,691.2 105.4% 60.1% $2,662.6 87.1% 50.9% 2015 $2,674.3 48.1% 45.4% 2014 $2,601.8 50.0% 49.2% 2013 $2,490.4 49.4% 45.4% USAA and Liberty Mutual continue to dominate homeowners with 61.9 percent of the market share. The Texas Fair Plan Association dropped its position at #17 down to #18 and had a decrease from 83.0 million in to 74.2 million in. The market share for independent agency companies had a slight gain from 24.2 percent in to 26.0 percent in. COMMERCIAL MULTIPERIL The commercial multiperil loss ratio also increased from 87.1% to 105.4 percent also the highest loss ratio since 2008, while the rest of the country only had a an increase from 50.9% to 60.1%. The new entity to the top 20 in was AmTrust up from the 21 spot in and Central at number 19 last year fell out of the top 20. COMMERCIAL AUTO The commercial auto loss ratio was at 82.1 percent, and this marks the sixth year in a row that the loss ratio was above 60 percent and less profitable than the countrywide loss ratio. There was one new company in the top 20, Markel. WORKERS COMPENSATION Workers compensation premiums decreased slightly again in. This marks the fourth year of total premium Commercial Auto $3,498.9 82.1% 70.2% $3,111.0 78.4% 69.1% 2015 $2,983.0 70.7% 65.9% 2014 $2,785.6 66.0% 64.1% 2013 $2,446.4 65.7% 62.9% Top 20 Commercial Multiperil Carriers in Texas 1 Progressive 1 450.7 12.9 68.0 2 Travelers 2 197.4 5.6 66.7 3 Zurich 3 172.5 4.9 125.3 4 Hallmark 4 160.1 4.6 77.3 5 Liberty Mutual 5 156.7 4.5 101.1 6 Berkshire Hathaway 8 149.2 4.3 64.3 7 Old Republic 9 127.5 3.6 77.4 8 Nationwide 7 125.4 3.6 100.2 9 AIG 6 118.1 3.4 111.9 10 Chubb INA 11 105.9 3.0 62.4 11 AmTrust 10 100.5 2.9 87.8 12 Markel 62 94.5 2.7 69.4 13 State Farm 13 86.2 2.5 95.9 14 W.R. Berkley 16 83.2 2.4 69.8 15 Farmers 14 76.0 2.2 77.4 16 Fairfax Financial 31 69.4 2.0 70.1 17 United Fire & Casualty 17 58.7 1.7 64.1 18 Hartford 15 55.0 1.6 94.5 19 Tokio Marine 18 51.5 1.5 88.6 20 Sentry 19 46.1 1.3 72.6 1 Hartford 2 219.2 8.1 82.0 2 Travelers 1 213.7 7.9 60.5 3 Nationwide 3 202.0 7.5 79.1 4 Liberty Mutual 4 158.7 5.9 121.4 5 Farmers 5 144.5 5.4 78.2 6 Chubb INA 6 132.6 4.9 318.4 7 Markel 20 119.2 4.4 153.7 8 Tokio Marine 7 110.7 4.1 63.3 9 CNA 8 104.8 3.9 90.6 10 State Farm 9 98.1 3.6 62.3 11 Allstate 11 83.5 3.1 65.0 12 Hanover 13 76.8 2.9 93.1 13 AIG 12 71.9 2.7 202.7 14 Zurich 14 59.3 2.2 266.8 15 Church Mutual 15 57.9 2.2 102.3 16 W.R. Berkley 17 50.8 1.9 52.2 17 Cincinnati 16 46.1 1.7 53.8 18 AmTrust 21 42.0 1.6 76.1 19 GuideOne 18 39.5 1.5 171.5 20 Argo Group 10 38.7 1.4 100.8 Top 20 Commercial Auto Carriers in Texas

Workers Compensation $2,343.9 35.8% 49.9% $2,364.9 40.1% 54.2% 2015 $2,741.9 44.2% 58.5% 2014 $2,843.8 46.2% 60.5% 2013 $2,673.6 47.6% 59.8% decreases. The workers compensation loss ratio of 35.8 percent continued a 13 year streak of profitable years for workers compensation in Texas. Texas Mutual Insurance continued to dominate the Texas market in with written premium of 992.1 million, representing a 49.6 percent market share, compared to 40.1 percent in. THE OUTLOOK FOR 2018 Insurance companies are reacting by filing for rate increases in various lines of insurance. Also, a movement towards ACV roof valuation for wind related claims appears to be gaining momentum as multiple carriers have filed endorsements for this option. The Texas economy continues to expand which will make Texas an attractive state for insurers despite the recent loss ratio problems. Top 20 Workers Compensation Carriers in Texas 1 Texas Mutual 1 992.1 42.3 36.6 2 Travelers 2 176.8 7.5 55.5 3 Liberty Mutual 4 127.3 5.4 49.1 4 Hartford 3 121.1 5.2 10.8 5 Zurich 6 112.5 4.8 11.4 6 Chubb INA 5 81.1 3.5 33.9 7 AIG 7 62.1 2.6-29.6 8 Service Lloyds 8 46.8 2.0 27.0 9 Old Republic 9 45.6 1.9 41.1 10 CNA 10 43.6 1.9 48.7 11 AmTrust 12 35.8 1.5 52.5 12 Amerisure 11 34.6 1.5 32.4 13 Accident Fund 13 33.6 1.4 52.0 14 W.R. Berkley 15 32.2 1.4 60.5 15 Great American 17 27.5 1.2 56.8 16 Berkshire Hathaway 14 27.1 1.2 41.0 17 Starr International 19 24.1 1.0 101.1 18 Fairfax Financial 16 22.0 0.9 13.8 19 XL CatlinAmerica 22 17.4 0.7 8.6 20 Sentry 20 15.8 0.7 57.8 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 1 State Farm 1 5738.2 11.1 10.7 2 Allstate 2 3709.7 6.9 6.9 3 Farmers 3 3247.9 6.4 6.1 4 Berkshire Hathaway 6 3127.8 5.1 5.9 5 Liberty Mutual 5 3070.9 5.4 5.7 6 Progressive 7 2793.2 4.6 5.2 7 USAA 6 2730.0 5.0 5.1 8 Travelers 8 1532.6 2.9 2.9 9 Chubb INA 9 1402.3 2.8 2.6 10 Nationwide 10 1334.3 2.7 2.5 11 Texas Farm Bureau 11 1214.8 2.4 2.3 12 AIG 12 1113.9 2.4 2.1 13 Texas Mutual 13 992.1 1.9 1.9 14 CNA 15 915.2 1.7 1.7 15 Zurich 14 893.8 1.8 1.7 16 AmTrust 16 835.2 1.7 1.6 17 Hartford 17 672.7 1.4 1.3 18 Markel 34 618.1 0.5 1.2 19 Consumers County Mutual 541.8 1.0 20 Tokio Marine US PC 18 527.8 1.0 1.0 21 Germania 19 513.8 1.0 1.0 22 W.R. Berkley 21 485.6 0.9 0.9 23 Sompo Hldgs US 25 433.8 0.8 0.8 24 Auto Club (AAA) 27 428.2 0.7 0.8 25 Old American 23 418.3 0.8 0.8 26 Assurant 26 414.7 0.7 0.8 27 Fairfax Financial 39 406.4 0.5 0.8 28 XL CatlinAmerica 24 387.1 0.8 0.7 29 Great American 28 359.6 0.7 0.7 30 Amica 29 356.3 0.6 0.7 31 Home State 20 325.7 0.9 0.6 32 Old Republic 33 303.7 0.6 0.6 33 MetLife 30 296.6 0.6 0.6 34 Allianz 36 277.1 0.5 0.5 35 Arch I 31 263.2 0.6 0.5 36 FM Global 35 252.6 0.5 0.5 37 Loya 32 252.5 0.6 0.5 38 QBE 37 238.4 0.5 0.4 39 Hallmark 40 238.3 0.5 0.4 40 Hanover 42 225.4 0.4 0.4 41 ACCC 45 220.6 0.4 0.4 42 Starr 41 213.1 0.4 0.4 43 Infinity P & C 201.4 0.4 44 American Access Casualty 199.7 0.4 45 Hochheim Prairie 49 187.5 0.3 0.4 46 Swiss Re 43 180.3 0.4 0.3 47 United Fire 178.3 0.3 48 Sentry 48 177.8 0.4 0.3 49 Kemper P 47 174.6 0.4 0.3 50 State Auto 50 174.5 0.3 0.3