Previously, this blog examined some of the findings from a survey commissioned by BrightClaim and conducted by the Ward Group. After separating the 71 insurance carriers analyzed by the survey into different "benchmark" categories, the report looked at the percentage of property lines and LAE ratios compared to each carrier's loss ratios, drawing from the 2013 financial statements.
The average loss and LAE ratio for participating companies was 58.7 percent. The benchmark group with the highest total combined loss ratio belonged to Ward's 50 group at 52.2 percent, which consists of 14 companies that demonstrated outstanding financial results over a 5-year period and strong performance in safety and consistency tests.
Overall, the average loss ratio for the five benchmark groups was 52.1 percent, and the average LAE ratio 6.5 percent. The survey also measured the pre-tax underwriting profits (excluding investments): The Ward's 50 group ranked highest, above 14 percent, with an overall profit amount greater than 8.5 percent.
Members of the "smaller carriers" group displayed both higher profits and lower loss and LAE ratios than the members of the large group, the latter of which reported the smallest profit percentage.
BrightClaim sponsored this survey, in part, to help carriers better understand the ways strategic claims service providers can impact financial performance. Be sure to return to this blog for further posts in this series.