This week General Casualty Insurance Companies reported its year-end 2005 financial results in its annual report to independent agents. The company posted improved results over 2004 and a significantly stronger showing than what the insurance industry as a whole expects to report.
General Casualty’s 2005 statutory combined ratio, the measure of an insurance carrier’s profitability on its insurance business, was 98.1. (A ratio of less than 100 means an insurer made an underwriting profit for every $1 in premium income.) Currently, experts are predicting a combined ratio average of 103.3 for the industry in 2005, due primarily to losses from hurricanes Katrina, Rita and Wilma.* General Casualty incurred $15 million in hurricane losses, representing less than 2 percent of its total 2005 premium writings of $1.16 billion.
The company attributes its fine showing to solid underwriting and a well-diversified book of business. “After successfully integrating two sister companies in the last five years and moving from a 12-state to a 25-state carrier, the advantage of being a super-regional is clear,” President and CEO Pete McPartland said in his message to agents. He added that the business decision to dramatically downsize the company’s personal lines book in Mississippi two years ago, which minimized General Casualty’s exposure to Gulf Coast hurricanes, had a significant impact on the 2005 results.
The company, through its parent company’s consolidated results, also increased its net income and policyholders’ surplus over the prior year. Winterthur U.S. Holdings, Inc., which includes General Casualty and sister company Unigard (based in Washington), reported consolidated statutory net income of $113.8 million, an increase of 10 percent over the previous year, and increased its policyholders’ surplus to $910.8 million. The group reported a consolidated statutory combined ratio of 95.2.
In addition to strong overall results, General Casualty also achieved a 17 percent increase in new commercial business production over the prior year, for a total of $146 million in new commercial business in 2005. The company also saw high account retention on its existing commercial lines book of business.
General Casualty officials attribute this commercial success to an expanded property value capacity; broadened eligibility for manufacturing operations, including plastics manufacturers; and additional Web-based quoting and submission applications that make it easier for agency partners to write accounts with the company.
* Projected by Conning Research and Consulting, Inc.
For more information please contact Anne M. Smith.