2020 Massachusetts Market Share Report | Fire Insurance

As Agency Checklists has done over the past decade, over the next couple of weeks we 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 issuing an annual report outlining the current state of the insurance marketplace in Massachusetts each year.

This year’s report discusses the insurance marketplace in Massachusetts as of 2018, the latest date for which complete data is available for the Division of Insurance to compile and analyze.

A brief introduction to Nicholas Barbon, the father of modern-day fire insurance

Before we begin, Agency Checklists thought it might be interesting to include again a little bit of history 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 2018, the most recent year for which complete data is available.

Facts about the Fire Insurance Market Place in Massachusetts:

• There are one-hundred and ninety-one (191) insurance companies currently licensed to write Fire Insurance in Massachusetts. This is four companies less than the one-hundred and ninety-five (195) who were licensed to write this line of insurance in 2017. It is interesting to note for comparison purposes that in 2016 there were 268 fire insurance writers.
• The total Direct Written Premium for these 191 insurers in 2017 was $262,672,681.
• The top 20 writers wrote approximately $168,102,130 of the total amount of Direct Written Premiums, representing a 71.0% market share.
• The remaining insurers writing fire insurance in Massachusetts held a 29% share of the market totaling $68,634,379 in Direct Written Premiums.

Are there any top insurers that are based in Massachusetts as well?

• Yes. There are four Massachusetts-based companies that are included in the top 20 list of fire insurance companies.
• The companies include the top-ranked Commerce Insurance Company with a 9.75% market share followed by Merrimack Mut Fire Ins Co with 6.11%, Arbella Mut Ins Co with a 2.47% market share, and Safety Ins Co with a 1.85% market share.

The list of the top 20 in the fire insurance marketplace

The following is the complete list of the top 20 fire insurers along with the amount of premium written and the corresponding market share.