SOURCE: Ward Group

Ward Group

July 15, 2014 15:30 ET

2014 Ward's 50 Top Performing Insurance Companies Named by Ward Group

CINCINNATI, OH--(Marketwired - Jul 15, 2014) - The list of Ward's 50® top performing insurance companies was released by Ward Group, an Aon Hewitt company and the leading provider of operational and compensation benchmarking and best practices services for insurance companies. Aon Hewitt is the global talent, retirement and health solutions business of Aon plc (NYSE: AON).

To develop its annual list of the top 50 performing insurance companies, Ward Group analyzes the financial performance of over 3,000 property-casualty insurance companies and nearly 800 life-health insurance companies domiciled in the United States and identifies the top performers in each segment based on objective data and subjective quality measures. Each company has passed all safety and consistency screens and achieved superior performance over the five years analyzed. This is the 24th consecutive year Ward Group has conducted the analysis. 

The Ward's 50 property-casualty group of insurance companies produced a 10.6% statutory return on average equity from 2009 to 2013 compared to 6.9% for the property-casualty industry overall. The Ward's 50 life-health group of insurance companies produced a 21.8% statutory return on average equity from 2009 to 2013 compared to 8.1% for the life-health industry overall. 

"Most insurers saw improvements in both financial returns and overall premium levels," explained Jeff Rieder, Partner and Head of Ward Group. "In clear signs of continued optimism, our research shows considerable investments are being made in technology, product enhancements and identifying ways to deliver a better customer experience. Companies will be challenged to manage the costs of these initiatives, but have strong financial positions to support the investments. Total policyholder surplus continues to grow and overall financial stability for the industry remains very strong. In selecting the Ward's 50, we identified 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 primary safety and consistency tests, including:

  • 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 (property-casualty)
  • Adjusted net income in at least four of the last five years (life-health)
  • 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 (property-casualty)
  • Five Year Average Combined Ratio (property-casualty)
  • Five Year Growth in Surplus (life-health)

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 life-health group of companies outpaced the industry for five year policyholder surplus growth (42.5% compared to 25.3%) and net premium income growth (22.7% compared to 16.6%). The Ward's 50 property-casualty group compared 7.6 points lower for the five year combined ratio (94.7% compared to 102.3%) and grew policyholder surplus by 28.0% compared to 20.0% for the industry since 2009. Net premiums written for the Ward's 50 property-casualty group grew 14.4% compared to the industry's 10.8% growth. 

In addition to achieving higher financial returns, the Ward's 50 benchmark continues to achieve lower expense ratios. "The expense ratio declined slightly in 2013 for the property-casualty benchmark but increased for the life-health benchmark. We still find the Ward's 50 benchmarks comparing better than the industry average," said Rieder. In 2013, expenses relative to revenue were 9.2% lower for the Ward's 50 property-casualty group of companies and 14.0% lower for the Ward's 50 life-health group. 

For a complete list of the 2014 Ward's 50 companies, visit www.wardinc.com. Comparisons based on benchmarks set by Ward's 50® companies are available in Ward's Results®, an insurance industry financial reference series. Customized reports of select Ward's 50 Benchmark Group comparisons for individual companies can also be ordered at www.wardinc.com.

About Ward Group

Ward Group, a McLagan/Aon Hewitt company, is the leading provider of benchmarking and best practices studies for insurance companies. The firm analyzes staff levels, compensation, expenses and business practices for all areas of insurance company operations and helps companies to measure results, optimize performance and improve profitability. For more information about Ward Group and the Ward Research Center, visit www.wardinc.com.

About Aon Hewitt

Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit www.aonhewitt.com.

Contact Information

  • Ward Group Media Contact:
    Betty Cornelius
    Ward Group
    Email Contact