SOURCE: Ward Group

July 14, 2015 15:30 ET

2015 Ward's 50 Top Performing Insurance Companies Named by Ward Group

CINCINNATI, OH--(Marketwired - Jul 14, 2015) - 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 nearly 3,000 property-casualty insurance companies and 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 25th consecutive year Ward Group has conducted the analysis. 

The Ward's 50 property-casualty group of insurance companies produced a 10.9% statutory return on average equity from 2010 to 2014 compared to 7.8% 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 2010 to 2014 compared to 8.9% for the life-health industry overall. 

"Most insurers saw improvements in overall premium levels, however, these premium gains were tempered by slightly lower financial returns," explained Jeff Rieder, Partner and Head of Ward Group. "Our research finds that companies are cautiously optimistic about continued growth in revenue in 2015 but they responded that maintaining profitability is becoming more difficult. Growth in technology and business analytics investments are at the highest levels we have ever measured. While companies expect to achieve efficiency gains and improvements in customer satisfaction from these investments, the costs may negatively impact expense ratios. Fortunately, 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 (32.1% compared to 23.9%) and net premium income growth (20.5% compared to 20.0%). The Ward's 50 property-casualty group compared 6.8 points lower for the five-year combined ratio (94.5% compared to 101.3%) and grew policyholder surplus by 30.2% compared to 21.9% for the industry since 2010. Net premiums written for the Ward's 50 property-casualty group grew 28.5% compared to the industry's 18.4% 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 2014 for both the property-casualty and the life-health benchmark. We still find the Ward's 50 benchmarks comparing better than the industry average," said Rieder. In 2014, expenses relative to revenue were 9.8% lower for the Ward's 50 property-casualty group of companies and 8.3% lower for the Ward's 50 life-health group. 

For a complete list of the 2015 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 wardinc.com.

About Aon
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