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, stable market share percentages and profitable loss ratios. The economy in Texas and the U.S. is booming, 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 $46.5 billion in, compared to $43.5 billion in, an increase of 6.9 percent. Every line of insurance featured in this report showed a percentage gain from to, ranging from 4.4 percent for commercial multiperil to 13.9 percent for commercial auto. personal lines premium volume increased 7.7 percent. The good news for extended to the loss ratio side as well. The loss ratio for each line reviewed for this report was profitable and moved very little from the previous year. This brings the string of profitable years to three. Here are the highlights in summary for : The aggregate loss ratio for all Texas companies for all lines of business was 54.4 percent (compared to 55.3 percent in ). The countrywide aggregate loss ratio was 56.1 percent (down slightly from 57.2 percent in ). The Texas loss ratio was lower than the national average in personal auto, homeowners and workers compensation and only slightly higher in commercial auto and commercial multiperil. Texas policyholders spent $46.5 billion on insurance premiums for all lines of insurance, which is 7.8 percent of the national premium volume of $555.2 billion (up from $502.2 billion in ). Texas premiums grew by 6.9 percent while national premiums increased 10.6 percent. Personal lines market share for Texas independent agency companies in increased slightly, from 26.2 percent in to 26.7 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 2005. Of course, each percentage point represents about $200 million in premium lost to direct writer companies or gained by independent agency companies 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 Insurnace Sales 2005- (Homeowners and Personal Auto) Agency Companies Direct Writers $16,274 $4,466 27.4% $16,637 $4,488 27.0% $17,094 $4,584 26.8% $18,018 $18,758 $4,612 25.6% $4,824 25.7% $18,977 $4,906 25.9% $19,632 $5,289 26.9% $20,626 $5,551 26.9% $22,458 $5,875 26.2% $24,175 $6,448 26.7% 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 72.6% 73% $73.2 74.4% 74.3% 74.1% 73.1% 73.1% 73.8% 73.3% 2005 2006 2007 2008 2009 2010 2011 2012
Personal Auto Personal Auto Dollar Figures in Millions Homeowners $7,860.7 46.2% 49.6% $7,252.3 44.8% 46.4% 2012 $6,407.2 54.4% 58.9% 2011 $6,022.1 71.3% 75.5% 2010 $5,750.4 48.4% 58.9% Homeowners Dollar Figures in Millions $16,314.5 65.6% 66.0% $15,205.5 64.3% 65.6% 2012 $14,218.8 65.6% 66.4% 2011 $13,610.3 63.4% 67.3% 2010 $13,226.6 58.4% 61.6% Direct Writers $11,626.0 71.3% $10,954.3 72.0% Agency Companies $4,688.4 28.7% $4,251.1 28.0% PERSONAL AUTO The top 20 companies in personal auto stayed exactly the same in for the third year in a row. There was movement, however, within the top 20. GEICO continued its rise toward the top, knocking Progressive out of the #4 position. Home State moved into the #7 position ahead of Texas Farm Bureau and Nationwide. Rounding out the top 10 at #10 was Liberty Mutual, dropping Old American into the #11 position. 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. Independent agency companies gained a little ground against direct writer companies, with 28.7 percent in compared to 28 percent in. The personal auto loss ratio of 65.6 percent was up slightly from 64.3 percent in and only slightly lower than the national average loss ratio of 66 percent. Direct Writers $6,101.0 77.6% $5,628.9 77.6% Agency Companies $1,759.7 22.4% $1,623.4 22.4% Top 20 Personal Auto Carriers in Texas - Top 20 Homeowners Carriers in Texas 1 State Farm 1 1,990.40 25.3 36.7 2 Allstate 3 937.20 11.9 45.4 3 Farmers 2 884.30 11.2 51.9 4 USAA 4 699.10 8.9 56.0 5 Liberty Mutual 5 649.60 8.3 49.1 6 Travelers 6 275.80 3.5 40.5 7 Nationwide 7 251.20 3.2 46.6 8 Texas Farm Bureau 8 230.30 2.9 76.2 9 Progressive (ASI) 9 204.40 2.6 48.3 10 Chubb 10 144.10 1.8 44.3 11 Amica 14 107.80 1.4 37.9 12 Auto Club (AAA) 12 103.30 1.3 42.7 13 Hartford 11 103.20 1.3 58.4 14 MetLife 13 101.00 1.3 70.2 15 Texas FAIR Plan 15 92.90 1.2 21.0 16 QBE 19 66.10 0.8 56.8 17 National Lloyds 17 62.30 0.8 44.5 18 Republic 16 61.80 0.8 42.3 19 Homeowners of America 20 59.70 0.8 69.8 20 Universal 18 57.80 0.7 50.2 1 State Farm 1 3,043.7 18.7 66.0 2 Allstate 2 1,875.8 11.5 57.2 3 Farmers 3 1,646.1 10.1 60.1 4 Berkshire Hathaway (GEICO) 5 1,493.9 9.2 70.8 5 Progressive 4 1,427.0 8.7 65.2 6 USAA 6 1,243.5 7.6 79.4 7 Home State 9 612.6 3.8 65.1 8 Texas Farm Bureau 7 607.0 3.7 71.6 9 Nationwide 8 530.9 3.3 69.6 10 Liberty Mutual 11 473.7 2.9 65.2 11 Old American 10 370.1 2.3 65.3 12 Titus 14 261.6 1.6 61.5 13 Republic 13 252.0 1.5 64.8 14 Loya 12 249.4 1.5 64.0 15 ACCC 15 228.0 1.4 63.1 16 Auto Club (AAA) 16 199.5 1.2 65.4 17 MetLife 17 162.8 1.0 61.1 18 Germania 18 150.9 0.9 64.5 19 Amica 20 113.0 0.7 77.9 20 Kemper 19 96.1 0.6 59.9
Commercial Multiperil $2,601.8 50.0% 49.2% $2,490.4 49.4% 45.4% 2012 $2,333.8 61.3% 56.7% 2011 $2,113.1 68.8% 62.8% 2010 $2,106.1 46.0% 50.6% HOMEOWNERS The homeowners loss ratio of 46.2 percent reflects a relatively quiet year weather-wise, although residents of Denton, Alice and Abilene might disagree after experiencing disastrous hail storms in their cities. As usual, however, hurricane season is what makes or breaks the loss ratio in any given year. No hurricanes struck the Texas coast in. The rest of the country also remained relatively catastrophe-free, producing a countrywide loss ratio of 49.6 percent in. The top 10 homeowners insurers stayed in exactly the same positions in. Progressive showed up in the homeowners statistics for the first time in, following its purchase of ASI in late, taking over the #9 position previously held by ASI. The second tier of the top 20 was comprised of the same companies, albeit with some shift in positions. Amica made the biggest jump, from #14 to #11. The top 5 companies State Farm, Allstate, Farmers, USAA and Liberty Mutual continue to dominate homeowners with 65.6 percent of the market share. The Texas Fair Plan Association maintained its position at #15 with an increase in written premium from $86 million in to $92.9 million in. The market share for independent agency companies stayed exactly the same at 22.4 percent in. COMMERCIAL MULTIPERIL The commercial multiperil loss ratio was a profitable 50 percent, marking two profitable years in a row, reflecting fewer Texas catastrophe losses. This was one of two lines of insurance included in this report that had Commercial Auto $2,785.6 66.0% 64.1% $2,446.4 65.7% 62.9% 2012 $2,170.5 68.9% 63.8% 2011 $2,011.6 58.4% 59.6% 2010 $1,850.0 56.7% 58.2% Top 20 Commercial Multiperil Carriers in Texas 1 Progressive 1 207.6 7.5 48.9 2 AIG 3 198.1 7.1 87.4 3 Travelers 2 173.3 6.2 57.8 4 Nationwide 6 146.0 5.2 79.4 5 Liberty Mutual 4 141.2 5.1 61.4 6 Hallmark 7 139.8 5.0 55.7 7 Zurich 5 138.2 5.0 83.7 8 Berkshire Hathaway 9 134.4 4.8 54.4 9 Old Republic 8 103.1 3.7 72.8 10 Farmers 11 77.7 2.8 62.1 11 ACE INA 10 74.5 2.7 42.7 12 State Farm 12 66.7 2.4 73.8 13 W.R. Berkley 14 60.6 2.2 77.7 14 Hartford 13 57.6 2.1 60.3 15 QBE 21 41.1 1.5 59.3 16 Republic 19 40.1 1.4 61.3 17 Allstate 18 38.3 1.4 58.6 18 Sentry 17 38.2 1.4 45.1 19 CNA 16 37.8 1.4 84.3 20 United Fire 20 35.8 1.3 55.1 1 Travelers 1 222.3 8.5 62.5 2 Hartford 2 202.9 7.8 37.8 3 Nationwide 3 196.9 7.6 55.5 4 Liberty Mutual 4 168.7 6.5 66.9 5 Farmers 5 155.6 6.0 66.0 6 CNA 6 119.7 4.6 50.7 7 Chubb 9 106.4 4.1 32.5 8 Philadelphia/Tokio Group 8 102.1 3.9 39.4 9 AIG 10 99.9 3.8 21.3 10 Zurich 7 93.6 3.6 49.6 11 State Farm 11 91.0 3.5 36.4 12 Allstate 12 75.7 2.9 52.5 13 Hanover 14 59.3 2.3 47.4 14 Church Mutual 13 57.9 2.2 47.3 15 Cincinnati 17 47.5 1.8 47.8 16 ACE INA 16 43.4 1.7 15.6 17 W.R. Berkley 18 43.1 1.7 47.2 18 State National 24 41.9 1.6 45.6 19 GuideOne 19 38.3 1.5 58.8 20 IAT 20 32.8 1.3 62.0 Top 20 Commercial Auto Carriers in Texas
Workers Compensation $2,843.8 46.2% 60.5% $2,673.6 47.6% 59.8% 2012 $2,445.0 47.7% 67.9% 2011 $2,162.4 43.3% 65.2% 2010 $1,919.6 51.6% 68.3% a slightly higher loss ratio than the countrywide average loss ratio. The top 20 companies stayed virtually the same, except State National entered for the first time at #18, knocking QBE out of its #15 position. Several other companies in the top 20 changed positions in. COMMERCIAL AUTO The commercial auto loss ratio was marginally profitable at 66 percent, but this marks the third 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 -- QBE at #15 knocked out Great American -- and plenty of position-shifting among other companies. WORKERS COMPENSATION Workers compensation premiums increased in for the fourth year in a row, up 6.9 percent over. s have increased 48 percent in the four years since dropping below $2 billion in 2010, reflecting continued improvement in business activity and employment. s had declined for five straight years prior to 2011. The workers compensation loss ratio of 46.2 percent continued a 10 year streak of profitable years for workers compensation in Texas. This is a remarkable achievement compared to the countrywide loss ratio, which hasn t dropped below 60 percent since 2005. Texas Mutual Insurance continued to dominate the Texas market in with written premium of $1.1 billion, representing a 40.1 percent market share, compared to 38.6 percent in. That was an increase of 10.6 percent in written premium, compared to the overall statewide increase of 6.4 percent. Nineteen other companies picked up the crumbs to comprise the top 20, which remained unchanged, but the closest competitor was Travelers with written premium of only $199.5 million. THE OUTLOOK FOR 2015 Texas weather has been relatively quiet so far in 2015, although companies and agents with policyholders in some areas may not appreciate that fact as much as others. Top 20 Workers Compensation Carriers in Texas 1 Texas Mutual 1 1,141.0 40.1 49.0 2 Travelers 2 199.5 7.0 46.7 3 AIG 4 183.6 6.5 2.5 4 Zurich 3 170.1 6.0 55.7 5 Liberty Mutual 5 165.5 6.0 55.7 6 Hartford 6 144.5 5.1 34.5 7 Service Lloyds 7 66.2 2.3 42.6 8 Old Republic 11 60.2 2.1 68.4 9 ACE INA 9 58.7 2.1 48.3 10 CNA 8 56.6 2.0 53.4 11 Chubb 10 55.5 2.0 42.2 12 Amerisure 12 36.8 1.3 10.1 13 Accident Fund 13 33.7 1.2 45.1 14 Fairfax Financial 14 30.4 1.1 1.8 15 Berkshire Hathaway 16 27.7 1.0 38.9 16 W.R. Berkley 15 26.4 0.9 58.7 17 HIIG 17 25.5 0.9 50.3 18 AmTrust 20 25.1 0.9 50.3 19 Farmers 19 20.4 0.7 32.8 20 Sentry 18 19.6 0.7 39.7 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. The high winds and hail storms that pounded North and Central Texas in April and May were bad, but probably not bad enough to push property loss ratios back to the unprofitable level. With those events behind us, only a major hurricane along the Texas coast remains as a results-changing possibility. Fortunately, hurricane forecasters believe the 2015 hurricane season will be a quiet one with fewer than the average number of hurricanes. Of course, it only takes one storm to make a bad season. We should see premium levels continue to rise in all lines as the market continues a modest hardening and the business community builds on its economic gains of the last five years.
TOP 50 Top 50 Companies 1 State Farm 1 5,347.9 11.8 11.5 2 Allstate 3 3,022.8 6.3 6.5 3 Farmers 2 2,981.3 6.7 6.4 4 Liberty Mutual 4 2,205.9 4.8 4.7 5 USAA 5 2,084.9 4.4 4.5 6 Progressive 7 1,921.2 3.6 4.1 7 Berkshire Hathaway 9 1,854.0 3.5 4.0 8 AIG 6 1,653.8 3.7 3.6 9 Travelers 8 1,532.5 3.5 3.3 10 Nationwide 10 1,371.0 3.0 3.0 11 Texas Mutual 11 1,141.0 2.4 2.5 12 Texas Farm Bureau 13 1,087.0 2.3 2.3 13 Zurich 12 1,011.6 2.3 2.2 14 CNA 14 763.5 1.7 1.6 15 ACE INA 15 711.3 1.6 1.5 16 Chubb 16 701.9 1.5 1.5 17 Hartford 17 670.1 1.5 1.4 18 Home State 18 640.6 1.3 1.4 19 Germania 21 458.1 1.0 1.0 20 W.R. Berkley 22 451.4 0.9 1.0 21 Republic 20 414.7 1.0 0.9 22 Old American 19 413.1 1.2 0.9 23 Assurant 23 396.9 0.8 0.9 24 XL CatlinAmerica 35 380.9 0.5 0.8 25 Endurance 24 364.5 0.8 0.8 26 Allianz 25 320.6 0.7 0.7 27 Great American 26 306.5 0.7 0.7 28 Auto Club (AAA) 28 303.9 0.6 0.7 29 Old Republic 32 288.0 0.6 0.6 30 Munich-American 41 283.9 0.5 0.6 31 QBE 27 280.4 0.7 0.6 32 Loya 29 276.0 0.6 0.6 33 MetLife 33 268.4 0.6 0.6 34 Fairfax Financial 30 265.4 0.6 0.6 35 Titus 38 261.8 0.5 0.6 36 Markel 34 261.5 0.5 0.6 37 AmTrust 43 260.6 0.5 0.6 38 FM Global 31 251.2 0.6 0.5 39 Philadelphia/ Tokio 37 243.8 0.5 0.5 40 Amica Mutual 42 232.3 0.5 0.5 41 Hallmark 36 229.1 0.5 0.5 42 ACCC 40 228.0 0.5 0.5 43 HCC 57 215.8 0.3 0.5 44 Arch 49 206.1 0.4 0.4 45 State Auto 47 188.8 0.4 0.4 46 Hanover 50 187.7 0.4 0.4 47 Sentry 46 184.8 0.4 0.4 48 Starr International 51 184.60 0.4 0.4 49 Hochheim 48 180.90 0.4 0.4 50 Kemper 45 175.80 0.3 0.4