The Best’s Special Report, titled, “Mutual Property/Casualty Insurers Managing Market Challenges,” states NPW growth over the last five years is attributed to rate actions, as dominant players in the mutual space maintain a considerable market share. The 10 largest mutual insurers in this population represented more than 70% of NPW in 2015. While this population is diverse,
In this most-recent five-year period,
This population of mutual companies reported a solid year of underwriting performance, with a stable loss ratio of 58.6 and a combined ratio of 100.3 in 2015. Both metrics are virtually unchanged from the previous year, and represent an improvement in operating performance compared with earlier years in the most-recent five-year period. Most notably, a decrease in catastrophic weather-related events in the last three years has contributed heavily to the favorable results. However, despite the stable loss ratios in recent years, an elevated underwriting expense ratio continues to marginally compress underwriting measures. The report notes that a significant percentage of
Despite these market challenges and above-average expense ratios, the steady loss ratios and net investment income in recent years have aided profitability while product diversification has helped to alleviate concentration risk. In the mutual company organization structure, policyholders maintain a defined set of rights and they also have ownership interests. Accordingly, the mission and performance expectations for a mutual can vary widely from those of its stock counterpart. In today’s challenging operating environment,
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