SOURCE: Ward Group

Ward Group

July 12, 2011 15:30 ET

Ward Group Names 2011 Ward's 50 Top Performing Insurance Companies

CINCINNATI, OH--(Marketwire - Jul 12, 2011) - The list of Ward's 50® top performing insurance companies was released by Ward Group, an operational consulting firm and leading provider of benchmarking and best practices services to the insurance industry.

Annually, 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. 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. This is the 21st year Ward Group has conducted the analysis.

The Ward's 50 property-casualty group of insurance companies produced a 13.8% return on average equity from 2006 to 2010 compared to 8.7% for the property-casualty industry overall. The Ward's 50 life-health group of insurance companies produced an 18.7% return on average equity from 2006 to 2010 compared to 5.7% for the life-health industry overall.

"The property-casualty and life-health industries have demonstrated the ability to manage the business very well during slow economic growth," explains Jeff Rieder, President of Ward Group. "While various sectors within the industry have been affected differently, it is important for companies to continue to focus on the fundamentals of maintaining profitable operations and make wise decisions to meet customer needs. 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 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 (55.9% compared to 30.3%) and net premium income growth (57.6% compared to 4.7%). The Ward's 50 property-casualty group compared 9.4 points lower for the five year combined ratio (90.2% compared to 99.6%) and grew policyholder surplus by 28.6% compared to 16.2% for the industry since 2006. Net premiums written for the Ward's 50 property-casualty group grew 0.9% compared to the industry's 2.5% decline.

In addition to performing well with financial returns, the Ward's 50 benchmark continues to achieve lower expense ratios. "The lower expense ratio is a good indicator these companies achieve better organizational efficiency relative to the industry," says Mr. Rieder. In 2010, expenses relative to revenue were 8.3% lower for the Ward's 50 property-casualty group of companies and 14.7% lower for the Ward's 50 life-health group.

For a complete list of the 2011 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 is the leading provider of benchmarking and best practices research studies for insurance companies. The firm analyzes staff levels, business practices and expenses for all areas of insurance company operations to help companies measure results, optimize performance and be more profitable.

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