NAIC Publishes Annual Profitability Report 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 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 BusinessDirect
Premiums
Earned
(000s) Net
Premiums
Earned
(000s)Private Passenger Auto Total250,613,225244,005,296Commercial Auto Total44,803,94538,789,577Homeowners Multiple Peril106,998,36794,582,613Farmowners Multiple Peril4,656,8414,354,757Commercial Multiple Peril45,066,65739,739,879Fire14,975,79012,606,970Allied Lines29,985,49919,506,577Inland Marine25,034,936 14,628,520Medical Professional Liability9,959,6148,868,023Other Liability79,793,19065,393,050Products Liability4,070,6093,166,134Workers Compensation50,937,00544,476,487Mortgage Guaranty6,280,6885,223,280Financial Guaranty*438,107463,552Accident and Health6,324,3029,489,002Warranty2,845,9101,209,770All Other22,658,71139,048,319Total All Lines705,443,396645,551,806

Profitability by Line of Insurance in Massachusetts

Line of BusinessDirect
Premiums
Earned
(000s)Losses
IncurredUnder-Writing
ProfitEarned
Prem
To Net
WorthPrivate Passenger Auto Total5,426,75349.214.491.6Commercial Auto Total986,04946.817.668.1Homeowners Multiple Peril2,617,91636.126.492.9Farmowners Multiple Peril4,1187.654.584.4Commercial Multiple Peril1,344,55237.0 18.369.2Fire335,56242.4 24.295.0Allied Lines382,21587.7(17.8)85.9Inland Marine555,28153.215.7113.5Medical Professional Liability336,15658.6(5.2)37.2Other Liability2,341,40255.45.846.5Products Liability123,62125.736.733.1Workers Compensation1,228,79159.41.039.5Mortgage Guaranty143,63335.440.891.7Financial Guaranty*4,295(17.5)(216.5)39.9Accident and Health107,26184.8(15.0)35.9Warranty18,29548.236.339.5All Other512,57927.033.077.3Total All Lines16,468,47947.914.568.5

Profitability by Line of Insurance in Connecticut

Line of BusinessDirect
Premiums
Earned
(000s)Losses
IncurredUnder-Writing
ProfitEarned
Prem
To Net
WorthPrivate Passenger Auto Total3,063,34456.87.384.3Commercial Auto Total480,51558.34.764.5Homeowners Multiple Peril1,591,39862.11.089.7Farmowners Multiple Peril7,37765.1(7.2)90.4Commercial Multiple Peril683,49451.14.263.5Fire152,13467.00.088.9Allied Lines215,48446.526.793.0Inland Marine347,94950.718.8116.5Medical Professional Liability220,04073.5(14.4)45.3Other Liability1,198,17060.2(2.5)41.2Products Liability52,8159.537.433.1Workers Compensation695,03454.87.135.8Mortgage Guaranty80,28657.618.090.7Financial Guaranty*2,675(6.1)(0.8)30.4Accident and Health60,35363.78.730.8Warranty9,36049.136.836.5All Other267,48444.617.270.3Total All Lines9,127,91057.25.464.6

Profitability by Line of Insurance in Maine

Line of BusinessDirect
Premiums
Earned
(000s)Losses
IncurredUnder-Writing
ProfitEarned
Prem
To Net
WorthPrivate Passenger Auto Total779,13854.310.896.4Commercial Auto Total172,20448.916.575.9Homeowners Multiple Peril459,95337.127.094.0Farmowners Multiple Peril5,96120.542.491.8Commercial Multiple Peril263,24141.214.875.6Fire49,27917.753.196.2Allied Lines64,98133.842.3107.2Inland Marine87,486102.7(37.3)107.7Medical Professional Liability47,39251.51.944.6Other Liability201,46332.732.850.2Products Liability8,9559.056.144.0Workers Compensation230,67363.4(9.5)40.9Mortgage Guaranty21,64032.943.692.8Financial Guaranty*2750.07.925.7Accident and Health13,91169.52.321.4Warranty4,07154.630.741.3All Other85,661428.2(393.8)79.7Total All Lines2,496,28461.30.974.0

Profitability by Line of Insurance in New Hampshire

Line of BusinessDirect
Premiums
Earned
(000s)Losses
IncurredUnder-Writing
ProfitEarned
Prem
To Net
WorthPrivate Passenger Auto Total902,57747.718.897.0Commercial Auto Total162,49643.422.470.5Homeowners Multiple Peril445,24736.729.093.2Farmowners Multiple Peril3,3076.358.895.7Commercial Multiple Peril264,49939.417.472.4Fire42,24437.134.793.3Allied Lines45,4888.762.7101.5Inland Marine99,95158.59.7118.6Medical Professional Liability51,70893.2(50.8)38.9Other Liability232,18228.733.347.5Products Liability11,246(4.9)75.937.2Workers Compensation205,55145.716.335.5Mortgage Guaranty35,64522.854.4111.4Financial Guaranty*1810.015.611.5Accident and Health17,01088.0(22.5)28.8Warranty6,12140.444.239.7All Other72,81141.215.880.7Total All Lines2,598,26442.721.572.0

Profitability by Line of Insurance in Rhode Island

Line of BusinessDirect
Premiums
Earned
(000s)Losses
IncurredUnder-Writing
ProfitEarned
Prem
To Net
WorthPrivate Passenger Auto Total996,71154.811.490.0Commercial Auto Total133,00342.223.168.3Homeowners Multiple Peril449,73947.817.493.4Farmowners Multiple Peril45125.640.2103.3Commercial Multiple Peril178,59441.714.064.8Fire46,09136.033.886.6Allied Lines72,08726.347.694.6Inland Marine81,397104.9(43.8)95.8Medical Professional Liability31,47474.1(29.9)27.7Other Liability279,45565.8(4.8)42.4Products Liability10,81150.2(16.8)29.4Workers Compensation213,15143.710.550.6Mortgage Guaranty21,23832.643.789.8Financial Guaranty*6050.012.79.0Accident and Health30,04948.929.381.8Warranty2,16152.832.745.3All Other104,44650.19.668.3Total All Lines2,651,46152.510.971.1

Profitability by Line of Insurance in Vermont

Line of BusinessDirect
Premiums
Earned
(000s)Losses
IncurredUnder-Writing
ProfitEarned
Prem
To Net
WorthPrivate Passenger Auto Total386,53544.322.1100.4Commercial Auto Total81,94942.923.276.5Homeowners Multiple Peril215,00932.032.893.6Farmowners Multiple Peril15,75649.612.394.4Commercial Multiple Peril144,36029.030.175.5Fire33,66542.735.298.4Allied Lines25,84649.227.697.8Inland Marine46,83952.515.8116.1Medical Professional Liability17,31779.8(43.9)37.0Other Liability117,44384.9(31.2)45.6Products Liability7,03223.619.435.7Workers Compensation169,90347.017.645.5Mortgage Guaranty12,48728.648.0113.2Financial Guaranty*430.015.65.2Accident and Health13,98799.5(27.4)39.3Warranty6,34433.644.233.0All Other194,89415.563.5132.5Total All Lines1,489,40841.724.376.7

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.