California’s top property/casualty insurance companies are slowly recovering after several years of decline in homeowner and earthquake coverage.
Last year, 15 of the 25 property/casualty insurers on the List saw their premium volume drop in part because insurers stopped offering earthquake insurance and because rates for workers’ compensation were down.
However, insurers are seeing a slight increase this year. Sixteen insurers that made this year’s List posted an increase in premiums and all 25 collectively earned about $20 billion in 1996.
“Insurers have had to deal with rate reductions, the Northridge earthquake and other economic factors that all impacted premiums in the early 1990s,” said Barbara Snyder, an analyst with the California Insurers Coalition, an industry-sponsored watchdog group. “What you’re seeing on your List is the continued resurgence.”
Workers’ compensation premium rates in California have been on a gradual rebound after falling an average of 15 percent two years ago, she said. This was due mostly to deregulation.
In addition, devastating losses from the 1994 Northridge earthquake led some companies to get out of the homeowners market. The state’s creation of the California Earthquake Authority late last year helped spur insurers to come back into the state’s homeowner market.
This year’s top three firms remained the same from last year State Farm Group, Farmers Insurance Group of Cos., and Allstate Insurance Group. Farmers is one of six based in Los Angeles County on this year’s List with the others including Auto Club, 20th Century Insurance Group, and Century-National Insurance Co.
Of the top three on this year’s List, only Farmers was able to post a premium increase over last year. Farmers grew by 9.5 percent from $2.8 billion to $3.03 billion in premiums.
“We were happy that Farmers was able to post a gain this year,” said spokeswoman Diane Tasaka. “And we expect this to increase as Farmers gets back into the earthquake insurance and homeowners insurance market through the rest of the year.”
State Farm remained in solid first-place with $3.7 billion, down about 1.2 percent from last year. Allstate posted an 11 percent drop from last year’s premiums.
The company took the dip because it stopped selling property insurance after the Northridge quake, according to spokeswoman Nancy Anderson. Allstate placed a moratorium on policies for new property sales from July 1994 to November 1996.
“Since the California Earthquake Authority passed, we opened up the market again and right now we’re generating a tremendous amount of new business,” Anderson said. “Property is one of our bread and butter products, and when you can’t write one of those it takes away a big part of the business.”
The biggest jump in the 1997 List was Travelers Insurance Group, which last year was at No. 22. This year the Hartford, Conn.-based firm came in at No. 12 as a result of its purchase of Aetna Inc.’s property and casualty group.
“We wanted to strengthen our property and casualty department, and 1996 is the year we did it,” said Keith Henderson, a spokesman for Travelers.
