NAIC Publishes Annual Profitability by Line by State Report

The National Association of Insurance Commissioners has released its annual report highlighting the various profitability levels in the Property & Casualty industry by both line of insurance and state.

How the NAIC compiles its data

Compiled and published each year, the Report on Profitability By Line By State in 2020 the report aggregates various data from annual statements in order “…to develop estimates of profits on earned premium and the return on net worth by line and by state.’ In addition, the report includes the various components of estimated profits including:

premiums earned;
losses incurred;
loss adjustment expense;
general expenses;
selling expenses;
state taxes,
licenses and fees;
dividends to policyholders;
changes in premium deficiency reserves;
underwriting profits;
investment income and federal income taxes.

As fluctuations in calendar year financial results occur, long-term historical averages are also provided.

Key highlights from this year’s report:

The NAIC highlighted the following data reports from this year’s report:

Total premiums earned increased in 2020, for the 11^th consecutive year while losses incurred, and loss adjustment expenses remained relatively flat.
The countrywide direct return on net worth for the total property and casualty insurance market decreased two percentage points to 6.6%.
Private Passenger Auto (PPA) makes up a large portion of the Property & Casualty market, accounting for approximately 36% of the total direct premiums earned in 2020.
The return for PPA increased over the prior year moving from 7.2% in 2019 to 10.5% in 2020.
For the past 5 years, losses and loss adjustment expenses accounted for over 70% of direct premiums earned countrywide for all property and casualty lines combined. During that same time, combined expenses accounted for approximately 26% of direct premiums earned.

Select Data from the Profitability Report

Please note the following is only select data that we have chosen from this year’s report and which we thought would be of most interest to our readers. The report, however, contains much more detailed data on each state’s profitability by line. As always, please refer to the full report (which can be accessed below) if planning to rely on any of the data presented below.

Percent of Direct Premiums Earned Countrywide – Direct and Net Premiums Earned Countrywide – IEE

Line of Business	Direct Premiums Earned (000s)	Net Premiums Earned (000s)
Private Passenger Auto Total	250,613,225	244,005,296
Commercial Auto Total	44,803,945	38,789,577
Homeowners Multiple Peril	106,998,367	94,582,613
Farmowners Multiple Peril	4,656,841	4,354,757
Commercial Multiple Peril	45,066,657	39,739,879
Fire	14,975,790	12,606,970
Allied Lines	29,985,499	19,506,577
Inland Marine	25,034,936	14,628,520
Medical Professional Liability	9,959,614	8,868,023
Other Liability	79,793,190	65,393,050
Products Liability	4,070,609	3,166,134
Workers Compensation	50,937,005	44,476,487
Mortgage Guaranty	6,280,688	5,223,280
Financial Guaranty*	438,107	463,552
Accident and Health	6,324,302	9,489,002
Warranty	2,845,910	1,209,770
All Other	22,658,711	39,048,319
Total All Lines	705,443,396	645,551,806

Profitability by Line of Insurance in Massachusetts

Line of Business	Direct Premiums Earned (000s)	Losses Incurred	Under-Writing Profit	Earned Prem To Net Worth
Private Passenger Auto Total	5,426,753	49.2	14.4	91.6
Commercial Auto Total	986,049	46.8	17.6	68.1
Homeowners Multiple Peril	2,617,916	36.1	26.4	92.9
Farmowners Multiple Peril	4,118	7.6	54.5	84.4
Commercial Multiple Peril	1,344,552	37.0	18.3	69.2
Fire	335,562	42.4	24.2	95.0
Allied Lines	382,215	87.7	(17.8)	85.9
Inland Marine	555,281	53.2	15.7	113.5
Medical Professional Liability	336,156	58.6	(5.2)	37.2
Other Liability	2,341,402	55.4	5.8	46.5
Products Liability	123,621	25.7	36.7	33.1
Workers Compensation	1,228,791	59.4	1.0	39.5
Mortgage Guaranty	143,633	35.4	40.8	91.7
Financial Guaranty*	4,295	(17.5)	(216.5)	39.9
Accident and Health	107,261	84.8	(15.0)	35.9
Warranty	18,295	48.2	36.3	39.5
All Other	512,579	27.0	33.0	77.3
Total All Lines	16,468,479	47.9	14.5	68.5

Profitability by Line of Insurance in Connecticut

Line of Business	Direct Premiums Earned (000s)	Losses Incurred	Under-Writing Profit	Earned Prem To Net Worth
Private Passenger Auto Total	3,063,344	56.8	7.3	84.3
Commercial Auto Total	480,515	58.3	4.7	64.5
Homeowners Multiple Peril	1,591,398	62.1	1.0	89.7
Farmowners Multiple Peril	7,377	65.1	(7.2)	90.4
Commercial Multiple Peril	683,494	51.1	4.2	63.5
Fire	152,134	67.0	0.0	88.9
Allied Lines	215,484	46.5	26.7	93.0
Inland Marine	347,949	50.7	18.8	116.5
Medical Professional Liability	220,040	73.5	(14.4)	45.3
Other Liability	1,198,170	60.2	(2.5)	41.2
Products Liability	52,815	9.5	37.4	33.1
Workers Compensation	695,034	54.8	7.1	35.8
Mortgage Guaranty	80,286	57.6	18.0	90.7
Financial Guaranty*	2,675	(6.1)	(0.8)	30.4
Accident and Health	60,353	63.7	8.7	30.8
Warranty	9,360	49.1	36.8	36.5
All Other	267,484	44.6	17.2	70.3
Total All Lines	9,127,910	57.2	5.4	64.6

Profitability by Line of Insurance in Maine

Line of Business	Direct Premiums Earned (000s)	Losses Incurred	Under-Writing Profit	Earned Prem To Net Worth
Private Passenger Auto Total	779,138	54.3	10.8	96.4
Commercial Auto Total	172,204	48.9	16.5	75.9
Homeowners Multiple Peril	459,953	37.1	27.0	94.0
Farmowners Multiple Peril	5,961	20.5	42.4	91.8
Commercial Multiple Peril	263,241	41.2	14.8	75.6
Fire	49,279	17.7	53.1	96.2
Allied Lines	64,981	33.8	42.3	107.2
Inland Marine	87,486	102.7	(37.3)	107.7
Medical Professional Liability	47,392	51.5	1.9	44.6
Other Liability	201,463	32.7	32.8	50.2
Products Liability	8,955	9.0	56.1	44.0
Workers Compensation	230,673	63.4	(9.5)	40.9
Mortgage Guaranty	21,640	32.9	43.6	92.8
Financial Guaranty*	275	0.0	7.9	25.7
Accident and Health	13,911	69.5	2.3	21.4
Warranty	4,071	54.6	30.7	41.3
All Other	85,661	428.2	(393.8)	79.7
Total All Lines	2,496,284	61.3	0.9	74.0

Profitability by Line of Insurance in New Hampshire

Line of Business	Direct Premiums Earned (000s)	Losses Incurred	Under-Writing Profit	Earned Prem To Net Worth
Private Passenger Auto Total	902,577	47.7	18.8	97.0
Commercial Auto Total	162,496	43.4	22.4	70.5
Homeowners Multiple Peril	445,247	36.7	29.0	93.2
Farmowners Multiple Peril	3,307	6.3	58.8	95.7
Commercial Multiple Peril	264,499	39.4	17.4	72.4
Fire	42,244	37.1	34.7	93.3
Allied Lines	45,488	8.7	62.7	101.5
Inland Marine	99,951	58.5	9.7	118.6
Medical Professional Liability	51,708	93.2	(50.8)	38.9
Other Liability	232,182	28.7	33.3	47.5
Products Liability	11,246	(4.9)	75.9	37.2
Workers Compensation	205,551	45.7	16.3	35.5
Mortgage Guaranty	35,645	22.8	54.4	111.4
Financial Guaranty*	181	0.0	15.6	11.5
Accident and Health	17,010	88.0	(22.5)	28.8
Warranty	6,121	40.4	44.2	39.7
All Other	72,811	41.2	15.8	80.7
Total All Lines	2,598,264	42.7	21.5	72.0

Profitability by Line of Insurance in Rhode Island

Line of Business	Direct Premiums Earned (000s)	Losses Incurred	Under-Writing Profit	Earned Prem To Net Worth
Private Passenger Auto Total	996,711	54.8	11.4	90.0
Commercial Auto Total	133,003	42.2	23.1	68.3
Homeowners Multiple Peril	449,739	47.8	17.4	93.4
Farmowners Multiple Peril	451	25.6	40.2	103.3
Commercial Multiple Peril	178,594	41.7	14.0	64.8
Fire	46,091	36.0	33.8	86.6
Allied Lines	72,087	26.3	47.6	94.6
Inland Marine	81,397	104.9	(43.8)	95.8
Medical Professional Liability	31,474	74.1	(29.9)	27.7
Other Liability	279,455	65.8	(4.8)	42.4
Products Liability	10,811	50.2	(16.8)	29.4
Workers Compensation	213,151	43.7	10.5	50.6
Mortgage Guaranty	21,238	32.6	43.7	89.8
Financial Guaranty*	605	0.0	12.7	9.0
Accident and Health	30,049	48.9	29.3	81.8
Warranty	2,161	52.8	32.7	45.3
All Other	104,446	50.1	9.6	68.3
Total All Lines	2,651,461	52.5	10.9	71.1

Profitability by Line of Insurance in Vermont

Line of Business	Direct Premiums Earned (000s)	Losses Incurred	Under-Writing Profit	Earned Prem To Net Worth
Private Passenger Auto Total	386,535	44.3	22.1	100.4
Commercial Auto Total	81,949	42.9	23.2	76.5
Homeowners Multiple Peril	215,009	32.0	32.8	93.6
Farmowners Multiple Peril	15,756	49.6	12.3	94.4
Commercial Multiple Peril	144,360	29.0	30.1	75.5
Fire	33,665	42.7	35.2	98.4
Allied Lines	25,846	49.2	27.6	97.8
Inland Marine	46,839	52.5	15.8	116.1
Medical Professional Liability	17,317	79.8	(43.9)	37.0
Other Liability	117,443	84.9	(31.2)	45.6
Products Liability	7,032	23.6	19.4	35.7
Workers Compensation	169,903	47.0	17.6	45.5
Mortgage Guaranty	12,487	28.6	48.0	113.2
Financial Guaranty*	43	0.0	15.6	5.2
Accident and Health	13,987	99.5	(27.4)	39.3
Warranty	6,344	33.6	44.2	33.0
All Other	194,894	15.5	63.5	132.5
Total All Lines	1,489,408	41.7	24.3	76.7