AmTrust Financial Services Inc. continued to gain marketshare in the workers' compensation business in 2015 as rivals American International Group Inc. and Liberty Mutual Holding Co. Inc. lost ground.
The AmTrust group, as consolidatedby SNL and including all U.S. insurance carriers under the company's current ownership,ranked No. 4 based on the workers' comp direct premiums written generated by the group as it existed at year-end 2015. As aresult of SNL's consolidation of workers' comp direct premiums written in 2015 by subsidiaries of Republic Cos. Inc., which AmTrustacquired April 18, the business volume generated by the group as it currentlyexists ranked No. 3.
AmTrust was the fastest-growingworkers' comp writer among the top 10 market players with a 17.43% year-over-yearincrease in direct premiums written in 2015. Therate of year-over-year growth was, however, considerably lower than the 31.92% reportedin 2014.
Commenting on the increasingly competitive workers' comp marketin California, President and CEO Barry Zyskind said the company expects growth to slow down in that marketdue to its already sizable presence and elevated competition. AmTrust ranked No. 4 in the California workers' compmarket in 2014 on a stand-alone basis, but thanks in part to the Republic Cos. dealplaced No. 3 by a wide margin in 2015.
Warren Buffett-led increased its marketshare to 4.31% in 2015 from 3.86% in 2014 after reporting a meaningful 16.02% year-over-yearincrease in direct premiums written. The conglomerate also saw direct incurred lossratio drop to 48.71% in 2015 from 53.44% in 2014.
The workers' compensation industrysteered close to underwriting profitability in 2015 even as the rate of premiumgrowth appeared to abate.The improvement in underwritingperformance was evidenced by the industry's 2015 net combined ratio, which improvedsignificantly to 93.17%, with 11 of the top 20 workers' comp writers posting combinedratios below 90%. For a business line that has generally ranged from mildly unprofitableto the worst-performing major line in the industry in some years, the 2015 combinedratio was the lowest combined ratio, excluding policyholder dividends, reportedin the past 15 years.
The industry showedsigns of returning to profitabilityin 2014 and was expected to book incremental improvement in 2015. Business Insurance reported, citing an October2015 report from A.M. Best, that the rating agency expected 2015 calendar-year resultsto show additionalimprovement in underwriting and overall operating performance compared with2014.
continued toremain atop 2015 workers' comp rankings, boasting a market share of 7.75% with $4.47billion in direct premiums written, up 3.39% from 2014. The insurer retained thetop spot in the worker's comp market share rankings for the fourth consecutive yearin 2015.
The Hartford FinancialServices Group Inc., which retained its No. 2 position, reported a 3.52%year-over-year growth in direct premiums written in 2015, compared with a year-over-yeardecrease of 4.03% in 2014. The Hartford reported $3.32 billion of direct premiumswritten and a 5.77% market share in 2015.
California's 's 7.19%year-over-year growth in direct premiums written in 2015 was considerably lower than the 2014 growth rate of 37.43%.The state-run workers' comp insurer of last resort improved its direct incurredloss ratio to 77.22% in 2015 from 81.55% in 2014. State Fund's improved significantly, to129.85% in 2015 from 143.19% in 2014, thanks to lower incurred losses and loss adjustmentexpenses.
Liberty Mutual's workers' comp directpremiums written dropped 6.73% year over year to $2.48 billion in 2015, droppingit to the seventh position in 2015 market share rankings from being the fourth-largestworkers' comp writer in 2014. The company in 2013 disclosed plans to in order to focus on underwriting more profitable lines of business. Among the top10 industry players, Liberty Mutual logged the highest year-over-year declinein direct premiums written, but the rate of decreasewas lower than the 12.73% year-over-year drop noted in 2014. The company's direct incurred loss ratio improved to 65.08%in 2015 from 75.43% in 2014.
With a modest 2.26% year-over-year increase in workers' comp direct premiums written in 2015, was theslowest-growing workers' comp writer among the top 20 industry players. movedup one place by posting a 9.83% year-over-year increase in direct premiums writtenin 2015, while ICW Group HoldingsInc.'s 26.81% year-over-year growth in direct premiums written helpedit move up by two places in the 2015 market share rankings.
Aggregate premiums written on a directbasis for the industry increased 4.01% year over year in 2015 to $57.64 billion,compared with 5.55% year-over-year growth in direct premiums written in 2014. Fifteen of thetop 20 industry players grew their workers' comp business in 2015 from a year earlier,with four reporting growth rates in excess of 15%.
The direct incurredloss ratio for the industry was 57.41% in 2015, down from 60.91% in 2014. Among the top 20 workers' comp insurers, American International Group Inc. logged the highest increasein direct incurred loss ratio in 2015, while CNAFinancial Corp. reported the greatest year-over-year decrease in themetric.
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