NAIC Releases Property-Casualty Profitability Report by Line by State

Graph showing increases and decreases in front of a background of dollars bills and change

December 20, 2017 |

Graph showing increases and decreases in front of a background of dollars bills and change

The National Association of Insurance Commissioners (NAIC) released the Report on Profitability by Line by State in 2016. The report estimates and allocates profitability in property-casualty insurance on a countrywide basis by state and by line of insurance. The ability to analyze results on a by-state, by-line basis enhances transparency of the financial impact the economic climate has had on each of these lines. When combined with other information, the report can be utilized in further analysis of competition and market performance.

The Report on Profitability by Line by State in 2016 pools calendar-year data from exhibits of the annual statement to develop estimates of profits on earned premium and the return on net worth by line and by state.

The report also shows 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.

Fronted group captives and risk retention groups writing in multiple states should find the by-line, by-state breakdown a useful reference for competition and market performance.

The complete report is available through NAIC Publications.

2016 COUNTRYWIDE UNDERWRITING PROFIT AND RETURN
ON NET WORTH OF SELECTED LINES*

Line of Coverage Underwriting Profit Return on Net Worth
Medical Professional Liability (6.3)% 5.8%
Other Liability (11.2)% 3.3%
Products Liability (19.8)% 3.9%
Workers Compensation 4.6% 7.6%
Commercial Auto Liability (13.1)% 0.4%
Commercial Auto Physical Damage (2.0)% 2.0%
Commercial Auto Total (10.4)% 0.6%
*Source: Excerpted from the National Association of Insurance Commissioners Report on Profitability by Line by State in 2016, published in December 2017.

December 20, 2017