CINCINNATI, OH--(Marketwire - July 13, 2010) - 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 20th year Ward Group has conducted the analysis.
The Ward's 50 property-casualty group of insurance companies produced a 14.3% return on average equity from 2005 to 2009 compared to 9.2% for the property-casualty industry overall. The Ward's 50 life-health group of insurance companies produced a 16.1% return on average equity from 2005 to 2009 compared to 3.7% for the life-health industry overall.
"Most companies now understand the current economic situation and its impact on their business. However, the scars from the last two years are still affecting business decisions," explains Jeff Rieder, President of Ward Group. "It is important for companies to maintain a long-term vision throughout difficult business cycles. 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 the following primary safety and consistency tests:
- 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)
- Risk-based capital ratio of at least 100% (property-casualty) or 150% (life-health) for each of the five years analyzed
- 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 (8.4% compared to 5.6%) and premium income growth (12.4% compared to 1.3%). The Ward's 50 property-casualty group compared 7.3 points lower for the five year combined ratio (91.4% compared to 98.7%) and grew policyholder surplus by 31.6% compared to 19.1% for the industry since 2005. Net premiums written for the Ward's 50 property-casualty group grew 3.2% compared to the industry's 3.1% decline.
A recurring theme with the Ward's 50 companies is achieving greater levels of efficiency compared to peer companies. "Although we do not directly use expenses as a factor in the Ward's 50 evaluation, a common attribute of the top performing segment is the ability to operate at lower expense ratios," says Mr. Rieder. In 2009, expenses relative to revenue were 8.1% lower for the Ward's 50 property-casualty group of companies and 16.8% lower for the Ward's 50 life-health group. "Our research consistently finds the top companies achieve a proper balance between managing expenses and making prudent investments in systems or processes to meet customer needs and corporate goals."
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 recognized leader for insurance company benchmarking and best practices and a major sponsor of primary operational research studies. Ward Group analyzes staff levels and expenses for all areas of insurance company operations. The firm's professional staff is uniquely qualified to help companies measure results, optimize performance and be more profitable.
For a complete list of the 2010 Ward's 50 Companies visit www.wardinc.com.
Contact Information:
For more information, contact:
Betty Cornelius
11500 Northlake Drive, Suite 305
Cincinnati, Ohio 45249-1662
Phone: 513-791-0303
www.wardinc.com