AM Best 2019 Homeowners RankingsSeptember 24, 2020
USAA Group direct premiums written rose 10.8% from the prior year, propelling it past Liberty Mutual Insurance Cos. to become the third-largest homeowners writer in the United States in 2019, according to the AM Best ranking of the top 100 U.S. homeowners writers Berkshire Hathaway Insurance Group, which for years shunned the line, saw its homeowners business jump 74 spots to No. 61 in a line where the great majority of carriers recorded single-digit growth.
Among the market leaders, share remained flat or moved fractionally compared with the prior year. However, the ranking shifted on varying degrees of growth.
Among the top-100 writers several homeowners insurers, two insurtechs notched significantly higher percentage increases. Insurtech managing general agent Hippo partner Spinnaker climbed 174.9% to $196 million in DPW, ranking No. 66. Newly public Lemonade saw business jump 147.1% to $115.7 million in DPW, ranking No. 97.
USAA moved up with $6.84 billion of direct premiums written, or 6.6% of the market. Liberty Mutual premiums increased 1.4% to $6.75 billion, the lowest percentage increase in the top-10 group.
Auto-Owners Insurance Group’s 7.7% rise to $1.77 billion in DPW outpaced Erie Insurance Group’s 4.2% growth in 2019, pushing it ahead of Erie to close out a top-10 list led solidly by State Farm Group, with $18.7 billion in DPW.
However, State Farm’s U.S. homeowners market share dropped for the second year in a row, to 17.9% from 18.4% in the prior year and18.6% in 2017.
Allstate Insurance Group remained the second-largest writer with $8.7 billion in DPW.
Among the 20 largest homeowners writers, DPW declined in 2019 for just two companies.
American International Group Inc. dropped two spots to No. 15 as its homeowners DPW fell 4.3% to $1.1 billion. Hartford Insurance Group retained its rank of No. 16 despite DPW falling3.2% to $951.9 million.
Two years ago, Berkshire Hathaway Guard Insurance Cos. entered homeowners. It’s now in 19 states with plans to write coverage nationally with a couple of years, said spokeswoman Elizabeth Hartman. “We’re happy with our homeowners products. We’re competitively priced and we have a lot of good options,” said Hartman. “We’re definitely looking to expand.”
Berkshire Hathaway had stopped underwriting homeowners insurance after Hurricane Andrew hit the Bahamas, Florida and Louisiana in 1992 when it became obvious a company could lose as much in one year as it made in the prior 25, Chairman and Chief Executive Officer Warren Buffett said last year.
However, in his most recent annual letter to shareholders Buffett referred to Guard Chief Executive Officer Sy Foguel as a star and Guard as a dynamic property/casualty insurer (Best’s News, July 17, 2020).
Hartman said Guard entered to market to fill a need for retail agents, most of whom sell commercial and personal lines, and to diversify after largely operating in the past as a monoline writer of workers’ compensation.
Guard accounts for about 60% of Berkshire Hathaway’s homeowners portfolio, said Hartman. It plans to keep growing personal lines on an admitted and non-admitted basis while managing its catastrophe aggregates, she added.
Homeowners multiperil accounted for 12.7% to 35.2% of top-10 overall company premiums last year, according to the ranking. At Berkshire Hathaway, $230.8 million of premium represented just 0.5% of Berkshire’s overall insurance business.
Insurtechs offering homeowners upped their presence in the 2019 top-100 list as they expand. HCI Group, the parent of insurtech TypTap, moved to 47 from 49 with $318.6 million in homeowners DPW. TypTap filed expansion plans recently with Florida regulators and is awaiting approval before submitting filings in additional states (Best’s News, Aug. 6, 2020).
Hippo fronting carrier Spinnaker Insurance Co. rank rose to 66 from 118 in the prior year ranking.
Hippo plans to acquire the carrier during the current quarter and operate it as a subsidiary. Hippo currently operates in 29 states that reach 70% of the homeowners market. Within a year it expects to expand operations to two of the three outstanding large states — New York and Michigan (Best’s News, July 23, 2020).
Source: AM Best