NAIC’s Deep Dive Into Profitability By Line & By State

How the NAIC compiles its data for the annual Profitability 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. This announce report provides a wealth of information through an aggregation of various data points culled from annual statements. In particular, the report highlights 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 2021 for the 12th 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 was 6.5% for 2021.

Private Passenger Auto (PPA) makes up a large portion of the property and casualty market, accounting for approximately 34% of the total direct premiums earned in 2021.

The return for PPA decreased from the prior year, moving from 10.5% in 2020 to 4.2% in 2021, with the 10-year average being 4.9%.

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 Liability151,755,049147,456,116Private Passenger Auto Physical106,671,537103,024,068Private Passenger Auto Total258,426,585250,480,184Commercial Auto Liability38,944,83133,235,932Commercial Auto Physical11,710,69110,304,714Commercial Auto Total50,655,52243,540,646Homeowners Multiple Peril114,011,61099,736,986Farmowners Multiple Peril4,839,9135,186,258Commercial Multiple Peril47,985,94842,262,558Fire16,848,68214,528,386Allied Lines36,070,95022,873,377Inland Marine27,650,62516,352,272Medical Professional Liability10,813,4729,720,577Other Liability94,036,31177,645,132Products Liability4,240,8403,445,731Workers Compensation51,566,18644,741,984Mortgage Guaranty6,038,2534,850,224Financial Guaranty408,030440,852Accident and Health6,629,6738,781,299Warranty3,057,5901,187,523All Other24,505,37447,899,130Total All Lines757,785,563693,673,119

Profitability by Line of Insurance in Massachusetts

LINE OF BUSINESSDIRECT
PREMIUMS
EARNED
(000S)LOSSES
INCURRED
(% of Direct Premiums EarnedUNDER-WRITING
PROFITEARNED
PREM
TO NET
WORTHPrivate Passenger Auto Liability3,069,76655.910.078.2Private Passenger Auto Physical2,526,83063.62.6112.6Private Passenger Auto Total5,596,59659.46.690.7Commercial Auto Liability789,44941.223.962.5Commercial Auto Physical281,45751.514.2104.5Commercial Auto Total1,070,90643.921.469.9Homeowners Multiple Peril2,737,03038.224.290.3Farmowners Multiple Peril4,372(9.6)74.690.4Commercial Multiple Peril1,451,98437.818.667.8Fire360,22836.134.890.0Allied Lines433,61621.252.380.3Inland Marine652,66646.917.9108.6Medical Professional Liability349,66548.20.129.9Other Liability*2,866,51449.015.447.2Products Liability130,25753.1(14.9)32.3Workers Compensation1,214,41661.3(0.4)38.0Mortgage Guaranty129,468(2.2)78.585.5Financial Guaranty*4,247178.9(426.2)21.7Accident and Health102,65867.66.233.9Warranty19,46158.132.534.0All Other*560,19730.528.072.9Total All Lines17,684,28348.415.166.6

Profitability by Line of Insurance in Connecticut

LINE OF BUSINESSDIRECT
PREMIUMS
EARNED
(000S)LOSSES
INCURREDUNDER-WRITING
PROFITEARNED
PREM
TO NET
WORTHPrivate Passenger Auto Liability1,994,98968.5(3.8)70.0Private Passenger Auto Physical1,168,89372.6(3.6)120.1Private Passenger Auto Total3,163,88370.0(3.7)82.7Commercial Auto Liability425,02360.14.158.0Commercial Auto Physical109,22855.811.3102.0Commercial Auto Total534,25159.25.663.6Homeowners Multiple Peril1,660,99251.114.086.5Farmowners Multiple Peril7,87622.941.289.0Commercial Multiple Peril720,10467.1(13.5)59.7Fire164,22230.739.983.3Allied Lines236,07443.231.788.2Inland Marine387,58040.126.0111.3Medical Professional Liability232,33789.9(33.4)36.1Other Liability1,382,16660.6(1.4)40.9Products Liability59,63588.1(42.4)33.1Workers Compensation705,52756.65.435.4Mortgage Guaranty79,348(1.0)77.982.4Financial Guaranty*2,107(75.6)69.211.4Accident and Health65,36774.90.232.6Warranty8,96444.948.233.1All Other281,66366.1(16.3)63.0Total All Lines9,692,09761.02.462.2

Profitability by Line of Insurance in Maine

LINE OF BUSINESSDIRECT
PREMIUMS
EARNED
(000S)LOSSES
INCURREDUNDER-WRITING
PROFITEARNED
PREM
TO NET
WORTHPrivate Passenger Auto Liability415,09160.76.780.0Private Passenger Auto Physical404,86162.26.0119.1Private Passenger Auto Total819,95261.46.495.5Commercial Auto Liability121,89850.016.363.8Commercial Auto Physical61,78147.518.9108.0Commercial Auto Total183,67849.217.274.0Homeowners Multiple Peril480,78632.932.492.1Farmowners Multiple Peril6,29936.527.195.7Commercial Multiple Peril280,45434.123.773.8Fire59,65923.948.499.1Allied Lines72,27527.848.7104.9Inland Marine100,08566.3(1.7)101.6Medical Professional Liability50,38945.210.136.4Other Liability227,50545.919.650.1Products Liability10,82111.150.448.1Workers Compensation246,44064.0(8.5)41.4Mortgage Guaranty20,142(3.7)80.788.6Financial Guaranty*2200.06.115.6Accident and Health15,21891.1(21.8)23.5Warranty4,83247.545.042.7All Other95,61734.223.375.2Total All Lines2,674,37248.016.572.7

Profitability by Line of Insurance in New Hampshire

LINE OF BUSINESSDIRECT
PREMIUMS
EARNED
(000S)LOSSES
INCURREDUNDER-WRITING
PROFITEARNED
PREM
TO NET
WORTHPrivate Passenger Auto Liability459,24952.716.782.1Private Passenger Auto Physical466,77361.27.9116.7Private Passenger Auto Total926,02257.012.396.5Commercial Auto Liability123,27630.738.662.3Commercial Auto Physical50,43045.720.7105.7Commercial Auto Total173,70635.033.470.7Homeowners Multiple Peril465,04140.825.390.6Farmowners Multiple Peril3,41435.826.593.0Commercial Multiple Peril282,02844.513.170.1Fire49,67518.548.292.9Allied Lines50,84326.452.3101.2Inland Marine114,24934.729.5113.9Medical Professional Liability51,38764.3(19.3)28.6Other Liability271,61838.826.349.3Products Liability13,31212.530.341.6Workers Compensation216,30547.312.836.2Mortgage Guaranty31,752(1.9)78.1104.3Financial Guaranty*2440.09.116.2Accident and Health20,48763.39.033.6Warranty5,73442.751.137.0All Other80,52625.335.077.4Total All Lines2,756,34345.220.470.7

Profitability by Line of Insurance in Rhode Island

LINE OF BUSINESSDIRECT
PREMIUMS
EARNED
(000S)LOSSES
INCURREDUNDER-WRITING
PROFITEARNED
PREM
TO NET
WORTHPrivate Passenger Auto Liability670,22459.88.678.7Private Passenger Auto Physical368,80865.54.6123.9Private Passenger Auto Total1,039,03261.87.290.4Commercial Auto Liability109,51751.015.861.3Commercial Auto Physical32,60652.313.8103.1Commercial Auto Total142,12251.315.467.6Homeowners Multiple Peril475,65152.513.089.9Farmowners Multiple Peril46736.327.897.0Commercial Multiple Peril189,96340.519.063.9Fire51,73049.320.485.3Allied Lines83,43636.437.094.6Inland Marine93,30461.30.191.2Medical Professional Liability35,361176.0(132.4)23.8Other Liability334,30955.210.243.1Products Liability13,67665.4(63.6)32.5Workers Compensation205,63448.67.948.6Mortgage Guaranty19,177(3.1)80.084.3Financial Guaranty*5500.00.27.4Accident and Health39,15736.644.891.0Warranty2,21365.528.341.5All Other104,87425.835.262.7Total All Lines2,830,65754.910.769.5

Profitability by Line of Insurance in Vermont

LINE OF BUSINESSDIRECT
PREMIUMS
EARNED
(000S)LOSSES
INCURREDUNDER-WRITING
PROFITEARNED
PREM
TO NET
WORTHPrivate Passenger Auto Liability180,94251.616.783.4Private Passenger Auto Physical214,62058.210.5120.5Private Passenger Auto Total395,56255.213.3100.2Commercial Auto Liability54,37833.834.364.5Commercial Auto Physical31,47643.023.4107.6Commercial Auto Total85,85437.230.375.6Homeowners Multiple Peril223,31440.823.391.7Farmowners Multiple Peril16,20240.222.093.1Commercial Multiple Peril149,34426.434.275.7Fire38,73042.328.3102.2Allied Lines30,14817.660.697.8Inland Marine52,21931.035.2109.3Medical Professional Liability19,07437.610.931.9Other Liability140,31144.418.445.6Products Liability7,42935.532.536.2Workers Compensation165,66272.2(11.7)42.9Mortgage Guaranty11,943(2.4)79.0106.8Financial Guaranty*2660.09.130.9Accident and Health15,35099.9(23.9)42.0Warranty7,52427.947.635.9All Other26,942(31.6)108.247.2Total All Lines1,385,87345.120.469.9

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.