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 11th 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 |
How to access the full report
The NAIC has made this report available for free on its website. For those interested in accessing it, please access the NAIC website.
