As we have done in the Spring over the past few years, over the course of the next couple of weeks, Agency Checklists will take a look at the current market shares and overall state of various lines of insurance operating within the Commonwealth of Massachusetts. As always, all of our information comes courtesy of the Division of Insurance, which is charged with compiling and issue an annual report outlining the current state of the insurance marketplace in Massachusetts each year.
Nicholas Barbon, the father of modern-day fire insurance
We thought it might be interesting to our readers to include a little bit of history this year about the actual origins of fire insurance.
According to the Encyclopedia Britannica, English economist, Nicholas Barbon, is widely considered the founder of modern-day fire insurance. Born in London in 1640, he received his M.D. in medicine from the University of Leiden in Utrecht, in 1661. In 1664, he became an honorary fellow of the College of Physicians. It was his experience during London’s Great Fire of 1666, however, and the “considerable part” he took in the rebuilding efforts in its aftermath, which inspired Barbon to start selling this new line of insurance. In about 1680, he set up an office in London, appropriately titled, “Insurance Office for Houses” where he officially sold fire insurance. As a result, the following is how we know define fire insurance today:
Fire insurance, provision against losses caused by fire, lightning, and the removal of property from premises endangered by fire. The insurer agrees, for a fee, to reimburse the insured in the event of such an occurrence. The standard policy limits coverage to the replacement cost of the property destroyed less a depreciation allowance. Indirect loss, such as that resulting from the interruption of business, are excluded but may be covered under a separate contract. Insurance rates are influenced by the quality of fire protection available where the building is located, the type of building construction, the kind of activity conducted within the building, and the degree to which the building is exposed to losses originating outside it.
As for the current state of fire insurance in Massachusetts, the following information reflects the current composition of this marketplace as of 2017, the most recent year for which complete data is available.
Facts about the Fire Insurance Market Place in Massachusetts:
- One-hundred and ninety-five (195) insurance companies are currently licensed to write Fire Insurance in Massachusetts. This is 73 companies less than the two-hundred and sixty-eight (268) insurance companies who were licensed to write this line of insurance in 2016.
- The total Direct Written Premium for these 195 insurers in 2017 was $262,672,681. Of note, the total is approximately $43,671,916 less than the total Direct Written Premium of 2016.
- Of note to those readers interested in the evolution of this particular market, the market share percentage of the top 20 insurance companies selling fire insurance in the Commonwealth has increased while its premiums decreased, as a result of the overall decrease in Written Premium for this line of business.
- Specifically, in 2016, this group of insurers enjoyed a 66.1% share of the marketplace, writing a total of $202,541,287 dollars in Direct Written Premium. As of 2017, while this group of top 20 insurers now enjoys a 73.4% share of the marketplace, there total Written Premium totaled $192,896,711.
- The remaining 175 insurers claims the remaining 26.6%% share of this market with Direct Premium Written totaling of $262,672,681 dollars.
Are there any top insurers that are based in Massachusetts as well?
- Yes. There are five Massachusetts-based companies that are included in the top 20 list of the fire insurance companies, including top-ranked Arbella with a 12.30% market share followed by Commerce/MAPFRE Insurance with 8.29% and Lexington Insurance with a 5.37% market share. The following is the complete list of the top 20 fire insurers along with the amount of premium written and the corresponding market share.
The list of the top 20 in the fire insurance marketplace
Company Name |
State |
Premium Written in MA |
Market Share in MA |
1. Arbella Protection Ins Co |
MA |
$32,308,824 |
12.30% |
2. Commerce Ins Co |
MA |
$21,774,934 |
8.29% |
3. Lexington Ins Co |
MA |
$14,115,622 |
5.37% |
4. Vermont Mut Ins Co |
VT |
$13,226,143 |
5.04% |
5. Affiliated Fm Ins Co |
RI |
$12,563,272 |
4.78% |
6. North Amer Elite Ins Co |
NH |
$11,972,648 |
4.56% |
7. Factory Mut Ins Co |
RI |
$10,199,805 |
3.88% |
8. American Home Assur Co |
NY |
$9,889,626 |
3.76% |
9. Liberty Mut Fire Ins Co |
WI |
$8,680,311 |
3.30% |
10. American Security Ins Co |
DE |
$8,651,154 |
3.29% |
11. Travelers Ind Co |
CT |
$8,068,221 |
3.07% |
12. Arbella Mut Ins Co |
MA |
$6,215,922 |
2.37% |
13. Metropolitan Prop & Cas Ins Co |
RI |
$5,073,303 |
1.93% |
14. Zurich Amer Ins Co |
NY |
$4,957,008 |
1.89% |
15. Foremost Ins Co Grand Rapids MI |
MI |
$4,950,551 |
1.88% |
16. Farm Family Cas Ins Co |
NY |
$4,688,241 |
1.78% |
17. AXA Ins Co |
NY |
$4,343,001 |
1.65% |
18. Safety Ins Co |
MA |
$4,283,868 |
1.63% |
19. Insurance Co Of The State of PA |
IL |
$3,560,531 |
1.36% |
20. American Guar & Liab Ins |
NY |
$3,373,726 |
1.28% |
