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Commercial Multiperil Writers in NJ, NY See Loss Ratios Climb: A.M. Best 2012 Data

Source: A.M. Best - Meg Green


Posted on 06 Mar 2013 by Neilson

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AM BestWriters of commercial multiperil non-liability insurance saw their 2012 adjusted loss ratios widen in New Jersey and New York as a result of Hurricane Sandy losses, but many saw their overall U.S. ratios improve for the line, according to insurance company annual statement data available in BestLink, A.M. Best Co.'s online financial system.

Companies among the top writers showed various degrees of impact from Sandy.

Travelers Group, the largest writer of commercial multiperil non-liability in both New York and New Jersey, saw its 2012 adjusted loss ratio in New Jersey widen to 151.43 from 56.59, and in New York, to 54.81 from 49.97.

The adjusted loss ratio is the measure of direct losses incurred divided by the difference between direct premiums earned and dividends to policyholders.

Sandy produced the largest number of claim notices in Travelers' history, Jay S. Fishman, chairman, chief executive officer, said during the company's fourth-quarter earnings conference call.

However, the company's total U.S. adjusted loss ratio for its commercial multiperil non-liability improved to 58.78 in 2012 from 73.55, according to BestLink.

Chubb Group of Insurance Cos., the second-largest writer of commercial multiperil non-liability in both states, saw its adjusted loss ratio widen in New Jersey to 215.46 in 2012 from 86.24 in 2011, and widen to 266.1 from 69.74 in New York.

Sandy also generated the largest number of claims in Chubb history, John D. Finnegan, chairman, CEO and president, said during the company's fourth-quarter conference call.

"Sandy had a huge financial impact on Chubb as well, $882 million before tax, the largest net impact of any catastrophe in the history of Chubb," he said, noting the company still posted an operating profit in the quarter.

For the total United States, Chubb's adjusted loss ratio grew in 2012 to 79.62 from 65.45, according to BestLink.

Missing from the preliminary data are companies including Hartford Insurance Group and Nationwide Group, which ranked among the top writers of CMP non-liability in New Jersey in 2011, and Towers Group, Hartford and Nationwide, who ranked among the top writers of CMP non-liability in New York in 2011.

Liberty Mutual Insurance Cos., the third-largest writer of CMP non-liability in New Jersey and the fourth-largest writer in New York, based on preliminary data, saw its adjusted loss ratio widen in New Jersey to 172.93 from 76.09 and in New York, it grew to 181.25 from 76.37.

David H. Long, president and CEO of Liberty Mutual Insurance, said the company saw a $576 million after-tax loss from Sandy, which brought about 100,000 claims, twice the amount of Hurricane Katrina.

For the entire United States, Liberty Mutual's adjusted loss ratio for CMP non-liability improved to 62.39 in 2012 from 79.07 in 2011.

Greater New York Group, the third-largest writer of CMP non-liability in New York and fourth-largest in New Jersey, based on preliminary data, saw its adjusted loss ratio widen in New Jersey to 102 from 76.58 and widen in New York to 55.62 from 26.09.

For the total United States, Greater New York's adjusted loss ratio for CMP non-liability improved to 63.87 from 65.29.

Rounding out the top five writers of CMP non-liability for New Jersey and New York is Hanover Insurance Group Property & Casualty Cos. Hanover saw its adjusted loss ratio widen to 144.75 from 61.2 in New Jersey and to 130.71 from 54.61 in New York.

The company's total U.S. adjusted loss ratio for the line improved to 73.95 from 81.12, according to BestLink, www.ambest.com/bestlink.

Extreme weather-related catastrophes are continuing to drive home the importance of risk managemen.

Sandy made landfall on the evening of Oct. 29, just southwest of Atlantic City, N.J., as a post-tropical cyclone. Total insured damages from the storm are expected by RMS to be up to $25 billion, which is one of the largest industry estimates.

Chubb Corp.'s insurance subsidiaries currently have Best's Financial Strength Ratings of A++ (Superior). Travelers and Greater New York currently have Best's Financial Strength Ratings of A+ (Superior). Subsidiaries of Hanover Insurance and Liberty Mutual currently have Best's Financial Strength Ratings of A (Excellent).


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