Another Big Year for US P&C Insurance: $591 Billion in Written Premiums

Posted by Rafael Gonzalez on Sep 20, 2016 11:49:15 AM

Big Year for US P&C InsuranceThe numbers are in, and the US property and casualty insurance industry had another big year in 2015. As reported by AM Best in Best's Review August 2016, the total US property and casualty direct written premium in 2015 was $591.16 billion, a 3.7% increase over 2014.

Auto Direct Written Premiums

As has been the case for several years, the auto direct written premiums were the largest portion at $231.18 billion. This was a very healthy 5.1% increase from 2014. On the private passenger side, as anticipated, private passenger auto liability written premiums accounted for the largest chunk at $119.50 billion. Private passenger auto physical damage accounted for $80.41 billion, while private passenger auto no fault accounted for $14.75 billion. On the commercial auto side of things, commercial auto liability accounted for $23.1 billion, while commercial auto no fault accounted for $.71 billion.

The top 25 writers in auto, which enjoyed a 78.6% market share, wrote $181.67 billion in premiums, a 5.3% increase from 2014. With a 16.0% market share, State Farm remained the largest auto writer in the US, writing $37.02 billion in auto premiums, 62.4% of the company’s premiums. Berkshire Hathaway had 10.3% market share, writing $23.88 billion in premiums, 79.7% of the company’s premium. With 8.8% market share, Allstate wrote $20.41 billion in premiums, which was 67.6% of their premiums. With an 8.5% market share, Progressive wrote $19.71 billion in premiums, which was 92.3% of its premiums. And rounding off the top 5, with 5.0% market share, Liberty Mutual wrote $11.46 billion in premiums, which was 38.4% of its premiums.

Homeowners Direct Written Premiums

Homeowners direct written premiums was again the second largest line at $89.22 billion. This was a 2.8% increase from 2014. The top 25 writers accounted for $66.74 billion, or 74.8% of market share. With a 19.6% market share, State Farm remained the largest homeowners writer in the US, writing $17.52 billion in homeowners premiums, 29.5% of the company’s premiums. Allstate had 8.9% market share, writing $7.93 billion in premiums, 26.3% of the company’s premium. With 6.7% market share, Liberty Mutual wrote $5.99 billion in premiums, which was 20.1% of their premiums. With a 5.9% market share, Farmers wrote $5.29 billion in premiums, which was 27.7% of its premiums. And rounding off the top 5, with 5.6% market share, USAA wrote $5.0 billion in premiums, which was 29.9% of its premiums.

Workers Compensation Direct Written Premiums

Coming in again as the third largest line, workers compensation direct written premiums totaled $57.62 billion, a very respectable 4.0% increase from 2014. The top 25 writers accounted for $40.23 billion, holding 69.8% of market share. With a 7.8% market share, Travelers remained the largest work comp writer in the US, writing $4.47 billion in work comp premiums, 19.3% of the company’s premiums. Hartford had 5.8% market share, writing $3.33 billion in premiums, 29.9% of the company’s premium. With 5.2% market share, Am Trust wrote $2.97 billion in premiums, which was 50.3% of their premiums. With a 5.0% market share, Zurich wrote $2.86 billion in premiums, which was 20.8% of its premiums. And rounding off the top 5, with 4.4% market share, AIG wrote $2.56 billion in premiums, which was 13.4% of its premiums.

Commercial Multi Peril Direct Written Premiums

And as expected again, commercial multi peril direct written premiums was the next largest portion at $39.7 billion. This was a 1.2% increase from 2014. As anticipated, commercial non-liability written premiums accounted for $25.28 billion, while commercial liability accounted for $14.43 billion.

The top 25 writers, which enjoyed a 71.2% market share, wrote $28.25 billion in premiums, a very small 0.5% increase from 2014. With an 8.1% market share, Travelers remained the largest commercial multi peril writer in the US, writing $3.22 billion in commercial premiums, 13.9% of the company’s premiums. Nationwide had 6.5% market share, writing $2.60 billion in premiums, 13.3% of the company’s premium. With 5.7% market share, Liberty Mutual wrote $2.28  billion in premiums, which was 7.6% of their premiums. With a 5.5% market share, Chubb wrote $2.17 billion in premiums, which was 10.5% of its premiums. And rounding off the top 5, with 4.5% market share, Hartford wrote $1.78 billion in premiums, which was 16.0% of its premiums.

Conclusion

2015 was another banner year for property and casualty insurers, writing close to $600 billion worth of insurance. What does that mean for one the country's biggest industries? As these P&C numbers continue to grow, are there burdens, responsibilities, and requirements the property and casualty insurance industry will have to bear? As these numbers have continued to grow, has it also awakened government's interest in the P&C insurance industry? And very specifically, has such success made federal agencies take a second and third look at P&C insurers to make sure they are abiding by and compliant with federal regulations applicable to such property and casualty insurers? Is this growth and success the reason for the Centers for Medicare and Medicaid Services' recent announcement on June 8, 2016, in which CMS indicated it is considering expanding its voluntary MSA review process to include the review of proposed liability insurance (including self-insurance) and no-fault insurance MSA amounts? Stay tuned as I explore the economics of the P&C successful numbers and CMS' announcement.

About Rafael Gonzalez

Rafael Gonzalez, Esq. is Executive Vice President and Chief Legal Counsel at Flagship Services Group. He has been a part of the insurance, medical, and disability industries since 1983. He has served as a thought leader on all aspects of liability, workers compensation, social security, Medicare, and Medicaid compliance since 1990. He speaks and writes on mandatory insurer reporting, conditional payment resolution, set aside allocations, CMS approval, and MSA and SNT professional administration, as well as the interplay and effect of these processes and systems and the Affordable Care Act throughout the country. Rafael can be reached at rgonz@tampabay.rr.com or 813.967.7598.

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Topics: Liability