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Ward Group Announces Top Performing P&C Insurers

Posted on 21 Jul 10

Annually, Ward Group analyzes the financial performance of over 3,000 property-casualty insurance companies domiciled in the United States and identifies the top performers. This group is called the Ward’s 50 for the year. Each Ward’s 50 company has passed all safety and consistency screens and achieved superior performance over the five years analyzed. The Ward’s 50 property-casualty group of insurance companies produced a 14.3% return on average equity from 2005 to 2009 compared to 9.2% for the property-casualty industry overall. This is the 20th year Ward Group has conducted the analysis.

“Most companies now understand the current economic situation and its impact on their business. However, the scars from the last two years are still affecting business decisions,” explains Jeff Rieder, President of Ward Group. “It is important for companies to maintain a long-term vision throughout difficult business cycles. In selecting the Ward’s 50, we identify companies that pass financial stability requirements and measure their ability to grow while maintaining strong capital positions and underwriting results.”

Safety and Consistency Tests

Insurance companies are evaluated and must pass minimum thresholds to be considered for the Ward’s 50 designation. Each company must pass the following primary safety and consistency tests:

• Surplus and premiums of at least $50 million for each of the five years analyzed
• Net income in at least four of the last five years
• Risk-based capital ratio of at least 100% for each of the five years analyzed
• Compound annual growth in premiums between -10% and +40%

Performance Measurements
Companies that pass the safety and consistency tests are measured and scored on the following elements:

• Five-year average Return on Average Equity
• Five-year average Return on Average Assets
• Five-year average Return on Total Revenue
• Five-year growth in Revenue
• Five-year improvement in Surplus to Written Premium
• Five-year average Combined Ratio

Key Performance Benchmarks
An important objective of the Ward’s 50 is to compare their performance as a group with the rest of the industry. In addition to achieving greater levels of income returns, the Ward’s 50 benchmarks also outperformed in other key performance benchmarks. The Ward’s 50 property-casualty group compared 7.3 points lower for the five-year combined ratio (91.4% compared to 98.7%) and grew policyholder surplus by 31.6% compared to 19.1% for the industry since 2005. Net premiums written for the Ward’s 50 property-casualty group grew 3.2% compared to the industry’s 3.1% decline. A recurring theme with the Ward’s 50 companies is achieving greater levels of efficiency compared to peer companies. “Although we do not directly use expenses as a factor in the Ward’s 50 evaluation, a common attribute of the top performing segment is the ability to operate at lower expense ratios,” says Mr. Rieder. In 2009, expenses relative to revenue were 8.1% lower for the Ward’s 50 property-casualty group of companies. “Our research consistently finds the top companies achieve a proper balance between managing expenses and making prudent investments in systems or processes to meet customer needs and corporate goals.

2010 Ward’s 50® Property-Casualty Companies (listed alphabetically)

Alleghany Group
Allstate Insurance Company
American Modern Insurance Group
Amica Mutual Insurance Group
Andover Companies
Assurant Group
Auto-Owners Insurance Group*
Balboa Insurance Company
Bear River Mutual Insurance Company
Brethren Mutual Insurance Company
Brotherhood Mutual Insurance Company
Capital Insurance Group
Chubb Group
Cincinnati Insurance Group*
CSE Insurance Group
The Commerce Group, Inc.
The Doctors Company
Donegal Insurance Group
Erie Insurance Group
Federated Mutual Group
Fireman’s Fund Insurance Group
First Insurance Company of Hawaii, LTD
FM Global
Franklin Mutual Insurance Group
Goodville Mutual Casualty Company
Great American Insurance Companies
HCC Insurance Holdings Group
Island Insurance Companies Group
Kentucky Employers’ Mutual Insurance
Louisiana Workers’ Compensation Corporation
Metropolitan Property and Casualty Insur. Co.
North Star Mutual Insurance Company
Ohio Mutual Insurance Group
Old Republic Insurance Group
Philadelphia Insurance Companies
Progressive Casualty Insurance Company
ProMutual Group
RLI Insurance Group*
Rural Mutual Insurance Company
Rural Mutual Insurance Company
Safety Insurance Group
Travelers Insurance Group
USAA Group*
Vermont Mutual Insurance Company
Virginia Farm Bureau
W.R. Berkley Corporation Group
Western National Insurance Group
*20-year recipient (1991-2010)

About Ward Group

Ward Group® is a consulting firm specializing in the insurance industry and the leading provider of benchmarking and best practices services, with expertise in staffing level analysis and expense management. We help companies measure results, optimize performance, and be more profitable.

Since 1991, Ward Group has worked with over 300 insurance companies throughout North America. Our in-depth, apples-to-apples benchmarking and accumulated data serve as the lifeblood of every project we undertake. Our professional staff is uniquely qualified to assist clients in achieving their expense and operational goals.