Bank of America Tops SNL Financial’s Insurance Performance Rankings of Top P&C Writers

Share Article

SNL analyzed detailed 2009 statutory insurance data for its ranking of more than 100 property and casualty companies.

News Image
This is the third straight year of deterioration in this group’s median operating ratio. Continued low interest rates, less income derived from reserve releases and continued rate declines in many lines of business all point to the likelihood of a fourth consecutive year in 2010.

Bank of America Corp.’s property and casualty operations ranked as the best-performing insurance company of 2009, according to SNL Financial’s analysis of 2009 statutory insurance data for more than 100 P&C insurers.

Bank of America's P&C operations, written primarily by subsidiary Balboa Insurance Co., saw profits soar, returning 35.1% on its equity and reporting an operating ratio of 60.7%. Premiums for the company's fire and allied lines also jumped 23.5% from 2008.

Placing a close second behind Bank of America was FM Global, followed by Agri General Insurance Co. FM Global had an operating ratio of 59.2% and its loss and LAE ratio declined to 41.7% in 2009 from 94.3% in 2008, while Agri General Insurance had the highest return on assets and second highest return on equity for the insurers ranked, at 31.7% and 54.8% respectively.

According to SNL’s analysis, commercial insurers, especially those focused on property and medical professional liability, dominated the 2009 insurance performance rankings.

The companies in SNL’s analysis had a median operating ratio of 88.8% in 2009. As Jon Wright, Director of Insurance at SNL, notes, “This is the third straight year of deterioration in this group’s median operating ratio. Continued low interest rates, less income derived from reserve releases and continued rate declines in many lines of business all point to the likelihood of a fourth consecutive year in 2010.”

Methodology behind the rankings
SNL examined 107 P&C companies with surplus of greater than $500 million. SNL excluded financial guaranty insurers to prevent their recent tumultuous experience from skewing the means of the metrics. To determine the performance scores of the companies, SNL selected 13 performance metrics and calculated the mean among the 107 companies for each metric. SNL then calculated each company's deviation from each of the 13 means. The deviation from the mean was standardized using a Z-test so the different metrics chosen could be compared. To minimize the effect of outliers, SNL set a range limiting the amount of deviation recorded for each company. The metrics reflect consolidated financials for each group.

SNL then applied weightings to the metrics. Return — ROE and ROA before dividends and income taxes — was weighted at 35%. Profitability — loss and LAE ratio, adjusted for reserve development, and operating ratio — was weighted 30%. Asset and surplus growth was weighted 15%, investment performance was weighted 10%, and reserve development and premium growth were each weighted at 5%. SNL determined strong earnings to be the most important measure of a company's performance and therefore weighted return heavily. Underwriting profitability also was valued highly because of the volatility of investment results in the current economic environment.

The 13 weighted deviations then were added together to calculate a final score. The final scores were then ranked from highest to lowest for the 107 companies.

This data is available as part of the SNL Information Service. To find out more, contact sales(at)snl(dot)com or 866.296.3743.

About SNL Financial
SNL collects, standardizes and disseminates all relevant corporate, financial, market and M&A data – plus news and analysis – on more than 3,300 public companies and 50,000 private companies in these industries: Banking, Financial Services, Insurance, Real Estate, Energy and Media & Communications. For more information, visit http://www.SNL.com.

Visit the SNL Press Room to learn more about resources available to members of the media.

SNL Contact
Monica Jenkins
Press Relations Manager
+1.434.951.6951
mjenkins(at)snl(dot)com

SNL Financial
One SNL Plaza
Charlottesville, VA 22902
+1.434.977.1600

Other office locations:
Ahmedabad, India; Arlington, Va.; Boston, Mass.; Boulder, Colo.; Islamabad, Pakistan; Jersey City, N.J.; London; Monterey, Calif.; New York.

###

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Monica Jenkins

434-951-6951
Email >
Visit website