Commercial Insurers Captured 22 of Top 25 Spots in S&P Global Market Intelligence U.S. Property and Casualty Industry Performance Rankings

Rhea-AI Summary

The annual U.S. Property and Casualty (P&C) Insurance Performance Rankings by S&P Global Market Intelligence revealed that commercial insurers dominated the top spots among the 100-largest P&C carriers. Kinsale Capital Group led for the second year, with significant growth in premiums, assets, and policyholders' surplus. Arch Capital Group and FM Global Group secured the second and third positions, respectively. Commercial insurers excelled in earnings, underwriting profitability, and balance sheet expansion, despite a slowdown in direct premiums written. Only two personal lines carriers, Progressive and Berkshire Hathaway, made it into the top 50, driven by superior private auto insurance performance.

Positive

• Kinsale Capital Group showed a 42.4% growth in direct premiums written and a 105.2% increase in volume over two years.
• Commercial insurers dominated the top 25 spots, benefiting from favorable pricing and terms.
• Arch Capital Group and FM Global Group ranked second and third, respectively, showing strong performance in key metrics.

Negative

• Only two personal lines carriers ranked among the top 50, indicating weaker performance for this segment.

Financial Analyst

The rankings published by S&P Global Market Intelligence show a clear dominance of commercial insurers over personal lines carriers in the U.S. Property and Casualty (P&C) insurance sector. Commercial insurers' strong performance was particularly notable in underwriting profitability and balance sheet growth, which suggests a robust risk management approach and effective pricing strategies.

Kinsale Capital Group Inc.'s impressive 42.4% growth in direct premiums written and over $1.57 billion in volume are remarkable data points that highlight their market penetration and operational efficiency. Growth at such a level can indicate strong demand for their products, efficient claims management and successful pricing strategies. Additionally, achieving this growth in a competitive market signifies effective leadership and strategic planning.

It's important for investors to note the significant outperformance of specialty commercial lines underwriters. This could be a signal of favorable market conditions in specific niches, suggesting targeted investment opportunities. However, the slower year-over-year growth in direct premiums written may indicate that while the current market conditions are favorable, future growth might not be as rapid, suggesting a need for cautious optimism.

Retail investors should consider the consistent performance of top-ranking companies and analyze the factors contributing to their success. Such companies often have resilient business models that can withstand market fluctuations, making them potentially stable investments in the long term.

Insurance Market Specialist

The S&P Global Market Intelligence report confirms that commercial insurers are thriving, especially those focusing on specialty lines. The favorable conditions in these segments have allowed firms like Kinsale Capital Group Inc. to dominate the rankings. Notably, Kinsale's ability to double its volume to $1.57 billion in just two years is a testament to its scalability and market adaptability.

Additionally, the emphasis on diversified product mixes among the top performers points to a strategic approach in not relying heavily on any single line of business. This diversification inherently reduces risk and can smooth out performance across different market conditions. The performance of Progressive Corp. and Geico (under Berkshire Hathaway) in the personal lines segment, particularly in private auto, indicates that despite the overall trend, there are still opportunities for well-managed firms in this space.

Understanding the nuances of combined ratios is critical. A lower combined ratio (below 100%) indicates profitability, as it means the company is paying out less in claims and expenses than it earns in premiums. Progressive and Berkshire's strong combined ratios in auto insurance suggest they have efficient operations and effective risk selection processes.

For retail investors, recognizing the significance of such metrics can provide insight into the operational health and profitability of insurers. It underscores the importance of a disciplined underwriting approach and how it can lead to sustained performance.

Only 2 personal line carriers ranked among the top 50

NEW YORK, July 10, 2024 /PRNewswire/ -- The U.S. Property and Casualty (P&C) Insurance Performance Rankings published by S&P Global Market Intelligence, an annual ranking of the 100-largest P&C carriers in the country, found that commercial insurers outperformed their peers in key metrics measuring earnings, underwriting profitability, balance sheet growth and other indicators of success. Commercial insurers benefited from an underwriting margin that outperformed the long-term average, despite slowing year-over-year growth in direct premiums written.

The U.S. Property and Casualty Insurance Performance Rankings are based on statutory financial results collected and compiled by S&P Global Market Intelligence. They are determined using 13 financial metrics from 2023 statutory filings grouped into six buckets: rates of return, underwriting profitability, balance sheet expansion, investment performance, prior-accident-year reserve development and premium growth. The categories are given distinct weightings to calculate performance scores for each of the 100-largest U.S. P&C entities based on 2023 net premiums written.

Kinsale Capital Group Inc. ranked as the top performing U.S. property and casualty insurer for the second consecutive year, scoring particularly highly on the basis of growth in premiums, assets and policyholders' surplus. Direct premiums written growth of nearly 42.4% was the highest among the top 100 P&C entities, and Kinsale's $1.57 billion in 2023 volume marked an increase of 105.2% from only two years prior. The U.S. subsidiary of Arch Capital Group Ltd. secured the second spot, while the U.S. subsidiary of FM Global Group ranked third.

"For a second consecutive year, specialty commercial lines underwriters dominated the U.S. Property and Casualty Insurance Performance Rankings, benefiting from continued favorable pricing, terms and conditions on many categories of business," said Tim Zawacki, insurance sector strategist at S&P Global Market Intelligence. "Diversity in product mix and a focus on disciplined underwriting served as common themes among the top performers."

Only two personal lines carriers ranked among the top 50 performers: The Progressive Corp. and Berkshire Hathaway Inc., the holding company for private-passenger auto insurer Geico Corp. The private auto businesses of both Progressive and Berkshire materially outperformed their peers in 2023 on the basis of their combined ratios in that line. Berkshire's overall score in the performance rankings also benefited from an extraordinary level of net realized capital gains.

Click here for more information on the S&P Global Market Intelligence U.S. Property and Casualty Insurance Performance Rankings.

S&P Global Market Intelligence's opinions, quotes, and credit-related and other analyses are statements of opinion as of the date they are expressed and not statements of fact or recommendation to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security.

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S&P Global Market Intelligence
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SOURCE S&P Global Market Intelligence

FAQ

What are the key highlights of the S&P Global Market Intelligence U.S. Property and Casualty Insurance Performance Rankings?

The rankings show commercial insurers dominating the top 25 spots, with Kinsale Capital Group leading for the second consecutive year due to significant growth in premiums, assets, and policyholders' surplus.

Which company topped the S&P Global Market Intelligence U.S. Property and Casualty Insurance Performance Rankings?

Kinsale Capital Group ranked as the top performer for the second consecutive year, driven by a 42.4% growth in direct premiums written and a 105.2% increase in volume over two years.

How did commercial insurers perform in the S&P Global Market Intelligence rankings?

Commercial insurers captured 22 of the top 25 spots, excelling in earnings, underwriting profitability, and balance sheet expansion, despite a slowdown in direct premiums written.

Which personal lines carriers made it into the top 50 of the S&P Global Market Intelligence rankings?

Only two personal lines carriers, Progressive and Berkshire Hathaway, ranked among the top 50, driven by strong combined ratios in their private auto businesses.

What factors contributed to the high rankings of Kinsale Capital Group in the S&P Global Market Intelligence performance metrics?

Kinsale Capital Group's high ranking was due to a 42.4% growth in direct premiums written and a 105.2% increase in volume over two years, along with strong asset and policyholder surplus growth.