This Just in: Known and Lesser Known Facts About the Industry
By CYRIL TUOHY, managing editor of Risk & Insurance®
Risk managers may have a handle on the risks and losses of their own companies, but do they have an overall grip of where broader industry losses are coming from when it comes to perils a long way off?
Headlines can be deceiving, and there are a hundreds ways to cut the numbers. If you thought, for example, that the largest number of acres lost to wildfire in 2009 could be found in Arizona, or California, you'd be wrong. In fact, in 2009, Alaska led the nation with 2,591,597 acres burned by 527 wildfires. Texas came in second with 753,261 acres lost to 16,614 wildfires, followed by New Mexico with 421,481 acres burned by 1,278 fires, according to the Insurance Information Institute (III), citing the National Interagency Coordination Center.
How about this: Of the top five states whose value of insured coastal property is most vulnerable to hurricanes, only two, Florida and Texas, share coast lines with the Gulf of Mexico. The other three are New York, Massachusetts and New Jersey.
Or take tornadoes, those menacing and often deadly whirling dervishes of the natural world. Just how deadly were those funnel clouds? How many people died because of twisters in the United States in 2009? 1,000? 500? 50? None of the above. Sorry. Try 21, from 1,305 tornadoes.
Speaking of catastrophes: nearly 75 percent of all U.S. catastrophe insurance losses in the 19-year period between 1990 and 2009 came from just two sources: hurricanes and tropical storms, and tornadoes. These two categories cost insurers a total of $250.2 billion in 2009 dollars (adjusted for inflation).
Over the same 19-year period, winter storms, terrorism, earthquakes, floods, fires and other losses cost the industry $87.1 billion, according to data from ISO's Property Claims Service.
The statistics come courtesy of the III in its 2011 edition of the "Firm Foundation" series of reports. The reports provide an annual snapshot of the industry and its contributions to the national economy.
The top-10 writers of commercial property/casualty insurance by direct premiums written in 2009, excluding state funds, are names familiar with every risk manager working in the United States today. They include: AIG, Travelers, Liberty Mutual, Zurich Financial Services, CNA Financial, ACE Ltd. and the Chubb Corp. The Hartford Financial Services Group, Nationwide Mutual Group and Allianz SE round out the top 10. These commercial carriers shared more than $101.4 billion in premium, the report said, citing data compiled by SNL Financial.
More interesting, though, is just how small a share of the commercial-lines marketplace each of these carriers control in terms of direct written premium.
AIG leads the pack with a 9.1 percent market share. Travelers is next with a 6.4 percent share, followed by Liberty Mutual with a 6.0 percent share, Zurich with a 5.7 percent slice, CNA with a 3.2 percent share, ACE with a 3.1 percent stake, Chubb with 3.0 percent, and Hartford with 2.9 percent. Nationwide Mutual and Allianz each control 2.1 percent of the premium pie.
In the workers' comp line in 2009, Liberty Mutual held the market share crown for direct written premium with an 11 percent share, followed by AIG with a 9.5 percent share. The other big carriers--Travelers, Hartford, Zurich, New York State Insurance Fund, State Compensation Fund of California, ACE Ltd., CNA and Accident Fund Group--each have a 6.8 percent share or less.
And now, one final question: How many personal and commercial-lines property/casualty carriers do you think were operating in the United States? 200? No. 500? No. 1,000? No. 2,000? No. Try 2,737.
February 15, 2011
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