< Previous48BEST’S REVIEW • DECEMBER 2022 Inland Marine Insurance Keep on Trucking: Online Shopping Helped Drive Inland Marine Premiums Over the Last Decade The growing inland marine segment added $15.7 billion in direct written premium from 2011 through 2021, aided by the escalation in online shopping. by Anthony Bellano M iles of highway teeming with 18-wheelers. Amazon, FedEx and UPS trucks negotiating neighborhood streets throughout the day. These are the signs of a changing world, one that has become more dependent on online shopping, with goods being shipped all over the country. While it saw a boom during the COVID-19 pandemic, online shopping was on the rise even before that, and the line of insurance that covers it has exploded over the last decade. Inland marine insurance covers products, materials and equipment when transported over land, via truck or train, or while temporarily warehoused by a third party. The direct written premiums associated with the line have more than doubled in the last 10 years, according to BestLink, increasing from $14.1 billion in 2011 to $29.8 billion in 2021. In total, 17 of the top 25 inland marine writers achieved double-digit annual premium growth in 2021, with both Allianz and Nationwide passing the $1 billion mark in annual premium, AM Best said in its Market Segment Report: Inland Marine Rebounding from Pandemic Obstacles. Rich Soja, global head of inland marine and North American head of inland marine for Allianz Global Anthony Bellano is an associate editor. He can be reached at anthony.bellano@ambest.com.Inland Marine Insurance 49BEST’S REVIEW • DECEMBER 2022 Corporate & Specialty, said there are a variety of reasons that the current market is favorable for inland marine growth, including rate and demand. AGCS sees 25.3% of its premiums come from inland marine, with a primary focus on construction and freight shipping. Between those two segments, AGCS sees a virtual 50-50 split, Soja said. “Most companies are getting a positive rate year-over-year on their renewals. Construction has been very active for a variety of reasons,” Soja said. “In the transportation sector, there’s been high demand for our clients’ services.” The inland marine segment grew at 8% a year from 2011 through 2019, according to the recent AM Best report. Even after a 2% dip in 2020 due to the pandemic, the line rebounded 15% in 2021, as travel and cargo movement restrictions were lifted. Andrew Cadelli, vice president of inland marine for CNA Insurance, said the rebound happened faster than he expected. CNA sees 28.9% of premiums from inland marine, with more of a focus on construction, Cadelli said. “At the end of the day, goods still had to move from point A to point B,” Cadelli said. “I would say the first half of the year [2020] dipped noticeably, but then it rebounded pretty quickly when we realized that we still have to move on with civilization. We found ways to more conveniently shop and more conveniently stock stores, those types of things.” The line rebounded from the pandemic by changing the way it did business and taking advantage of an increase in demand. That demand brought with it maintenance issues that come with keeping trucks on the road longer. Like everyone else, the industry is also remaining wary of a possible recession, and depending on whom you ask, that impact could have lasting consequences. The Emergence of Last-Mile Delivery and Pandemic Impacts As online shopping becomes more popular, there is more demand for drivers and their services. The Key Points Changing World Growth: The growth of online shopping fueled the emergence of last-mile delivery shipping, creating a new category of drivers as long-haul truckers exit the industry. Double-Digit Premium Growth: In total, 17 of the top 25 inland marine underwriters achieved double-digit annual premium growth in 2021, according to a recent AM Best report. The Proof Is in the Premiums: Direct written premiums from the industry as a whole shot up to $29.8 billion in 2021, from $14.1 billion in 2011.Inland Marine Insurance 50BEST’S REVIEW • DECEMBER 2022 last-mile delivery market itself has been projected to grow to $66 billion by 2026, from $39.57 billion in 2020, according to a 2020 Valuates report. “The value of new trucks hitting the road is significantly more than the trucks they are replacing,” said Jessica Frankovich, Inland Marine Underwriters Association chair and executive vice president, Custom Property & Inland Marine for Seneca Insurance Co., a wholly owned subsidiary of Crum & Forster. “New vehicles are scarce, so many insureds are taking salvage. Given our country’s pattern of consumer spending via online platforms, the last-mile delivery part of the trucking industry is booming, which is also contributing to premium growth.” Cadelli said that many truckers who had been employed by large trucking firms as contractors found other less costly and asset-intensive roles by entering the last-mile delivery industry. “We saw many owner-operators that owned their own trucks and contracted with large carriers, sold their truck/assets and became last-mile operators or small firms shifted to a more local focus,” Cadelli said. “The fleets that were created in the last two years are amazing. You look outside in the neighborhood and you see five trucks fly by throughout the day.” The amount of freight being shipped is nearing pre-pandemic highs, but is still slightly down from the August 2019 peak. According to indexed stats from the U.S. Bureau of Transportation Statistics, freight being shipped in April 2020 was about 25% higher than the average amount of freight that was being shipped in 2000. In August 2019, it was 42% higher. Shipping was nearing that level again as of February of this year, when it was 40% higher. Like most industries, both the shipping companies and the insurers changed the way they did business. “When I talk to a lot of brokers and some of the larger freight logistics companies, there’s been a complete shift in the landscape of what they’re actually doing,” Cadelli said. “There’s been a lot of different contracts, a lot of different channels for these companies to pivot into that they were probably just trying to get by early on in the pandemic days. They’ve now actually generated completely different divisions, completely different revenue sources for them. A lot of companies that were hauling washing machines are now doing truck load freight for large logistics companies. It allowed a lot of the smaller and mid-size companies to weather the last few years better than they otherwise would have.” AGCS developed an app that allows it to inspect facilities through the use of cell phones. Using the app is now a permanent part of the company’s process, along with on-site inspections. “How we survey our insureds has changed to a certain degree,” Soja said. “For two years, our transportation insureds and other clients within marine wouldn’t let us on site because of COVID,” he said. “We would normally go out and send a fire inspection engineer out to an insured location. We had to come up with different ways of making sure that what we thought was going on was going on.” Maintenance Struggles to Keep Up With Mileage But the growth has come with challenges, including insureds keeping up with demand by keeping trucks on the road longer. The end result is maintenance issues that result in more claims for insurers to handle. “Trailers catching on fire as a result of improper maintenance—we’ve seen a bit more than in previous years,” Soja said. “Since times are good, motor carriers want to keep trucks on the road, so they skip “Given our country’s pattern of consumer spending via online platforms, the last-mile delivery part of the trucking industry is booming.” Jessica Frankovich Inland Marine Underwriters Association51BEST’S REVIEW • DECEMBER 2022 an occasional maintenance issue. If there is damage to the vehicle, you try to get it right back on the road as soon as possible because the demand is there and you want to capitalize on the demand that is being presented to you. In addition to the perennial issue of a shortage of quality drivers, we are concerned about overrunning vehicles, maybe not doing as much maintenance because business is good and you want to capitalize.” “Any time there’s a recessionary environment and expenses have to be cut, maintenance isn’t as much of a spend as it otherwise is,” Cadelli said. “In a lot of these large fleets, the mechanic staff is pretty large, and if you’re not able to staff that, you may not be able to turn around the maintenance on a truck on a normal schedule like you could.” Frankovich said although people are returning to in-person work, there are still fewer cars on the road than there were pre-COVID; in the meantime, there are now more trucks out there. As for theft, the industry reported a 15% decrease in cargo thefts in 2021, Frankovich said. In the first quarter of 2022, CargoNet reported thefts were down 73%, as there were fewer thefts that target consumer goods such as toilet paper, Frankovich said. The challenge that has received the most coverage is an ongoing driver shortage for long- haul trucking, due in part to the increase in last- mile delivery drivers. AM Best Senior Industry Analyst Christopher Graham wonders if some former long-haul drivers are now driving trucks for some of the major online retailers. “Not that you need a CDL to drive those Amazon Prime vans, but if you have the experience with the CDL, it probably helps you get that job,” Graham said. “It’s probably a better job than long-haul trucking.” “If you’re a professional driver and you’ve been driving across the country for 10 years and then you get an offer to stay at home with your family and just do around-town deliveries, that’s a pretty good setup,” Soja said. “The construction industry is competing with the transportation industry for labor from a certain perspective, as well.” “What the pandemic created was an environment in which truckers didn’t want to be away from home,” Cadelli said. “Whether it was through saving stimulus money or the availability to work locally, you had a lot of people that decided to exit the industry. We did see a migration of people. I’m not sure what brings them back.” Frankovich said the driver-training process is Best’s Rankings Top 5 US Inland Marine Writers — 2022 Edition Ranked by 2021 direct premiums written. ($ Thousands) 2021 RankCompany / GroupAMB#2021 Direct Premiums Written% of Company Premiums 1Liberty Mutual Ins Cos000060$4,077,5319.8 2CNA Ins Cos0183133,637,50828.9 3Chubb INA Group0184981,743,3416.4 4Allianz US PC Ins Companies0184291,401,63325.3 5Amer Intl Group018540 1,385,3669.4 Source: — State/Line (P/C Lines) - P/C, US ; data as of Oct. 3, 2022. -4 -2 0 2 4 6 8 10 12 14 16 0 5 10 15 20 25 30 35 20112012201320142015201620172018201920202021 YoY % Change ($ billions) Direct Premiums WrittenYoY % Change US Inland Marine – Direct Premiums Written Source: Inland Marine Insurance 52BEST’S REVIEW • DECEMBER 2022 a challenge for many in the industry. A large part of the industry is facing a driver shortage, in part because there is a longer lead time for training and licensure for long-haul truckers. The industry adapts quickly, so it’s easier to find last-mile delivery drivers. Therefore, the industry adapts and modifies routes where it can, she said. Cadelli said a recession could be a bridge for some people who entered the industry through last-mile deliveries to get into long-haul trucking. Graham said that if companies like Amazon were to go more autonomous with its last-mile deliveries, their drivers may find their way into long-haul trucking. According to a Straits Research report published in September, the global autonomous last-mile delivery market was valued at $11.90 billion in 2021, and it was expected to reach $84.90 billion by 2030. The line uses mobile robots that can quickly and autonomously deliver small packages, mail, or groceries, according to the report. The impact of rising gas prices on the industry is becoming significant, as well, with the average truck putting on over 100,000 miles per year, Frankovich said. Then there’s the growing possibility of an imminent recession. In addition to his view of a recession as a possible bridge, Cadelli said drivers who left the industry altogether might find their way back. “As unemployment increases, employment in the trucking space might increase as well,” Cadelli said. “Some of the people who might have left the industry who are either not working today or have found themselves in a position that may not exist might actually come back to the trucking space and might help some of those things out.” Cadelli said he doesn’t envision a recession that lasts long. “At this point in time, barring any sort of geopolitical event or monetary policy mistake, a recession is probably going to be short and shallow, which I think would really not have much of an impact. We might see a slight dip in revenue, but perhaps not.” A prolonged recession would have the most impact on logistics and warehousing, Cadelli said. Soja said he believes contractors would be able to weather the storm better than trucking, particularly those building projects as part of the infrastructure bill. Graham said a recession would “absolutely have an impact” on the industry. “When you have a recession, certainly private construction’s going to slow. Private construction is a larger chunk than public construction.” In transportation, motor carriers operate on a relatively thin margin, Soja said. “What we’ve seen in the past is when demand dries up, revenue opportunities go down. That margin begins to whittle away and we see a greater number of bankruptcies as we head into a recession for transportation carriers.” Frankovich concurred. “From a shipping standpoint, a recession will lead to less consumer demand for goods, which will lead to less manufacturing, which will lead to lower shipping activity. Of course, anytime we enter into a recession, we anticipate a forced shrinkage of the employment market. Layoffs will most likely include both trucking and construction.” “Lower shipping activity may result from ongoing inflationary pressures if the U.S. moves toward a recession,” AM Best said in its report. “However, inflationary pressures on cargo values could lead to premium increases that outpace the drop in goods shipped.” BR “Whether it was through saving stimulus money or the availability to work locally, you had a lot of people that decided to exit the [long-haul trucking] industry. We did see a migration of people. I’m not sure what brings them back.” Andrew Cadelli CNA InsuranceBest’s Rankings 53BEST’S REVIEW • DECEMBER 2022 Best’s Rankings Top 25 US Ocean Marine Writers – 2022 Edition Ranked by 2021 direct premiums written. ($ Thousands) 2021 Rank 2020 RankCompany / GroupAMB# 2021 Direct Premiums Written % Change in Premiums Market Share (%)Adjusted Loss Ratios % of Company Premiums202120202019202120202019 11Amer Intl Group 018540$698,12311.415.015.015.230.637.429.64.7 22Berkshire Hathaway Ins000811363,7772.87.88.58.143.581.568.30.7 33Travelers Group018674317,3417.96.87.16.954.650.454.31.0 44Chubb INA Group018498305,86515.26.66.46.864.520.336.21.1 56Starr Intl Group018756300,55617.86.56.15.977.078.791.76.6 65Tokio Marine US PC Group018733285,45511.86.16.15.150.662.456.02.8 77Hartford Ins Group000048181,1456.43.94.14.651.993.986.31.3 89CNA Ins Cos018313168,81312.43.63.63.567.960.259.91.3 98Great Amer P & C Ins Group004835168,60710.03.63.73.033.948.654.52.2 1010Intact US Ins Group018458148,8555.03.23.43.254.359.545.49.3 1111Liberty Mutual Ins Cos000060141,2196.23.03.22.863.656.766.30.3 1212Markel Corp Group018468138,78610.93.03.03.454.840.160.11.9 1316Amer Steamship Owners Mut P & I Assn000161130,36541.02.82.22.973.549.748.5100.0 1415Zurich Ins US PC Group018549110,96111.72.42.42.354.747.957.40.7 1513Allianz US PC Ins Companies018429110,3864.62.42.54.338.475.393.42.0 1614XL America Companies01855795,729-3.72.12.42.870.571.972.21.2 1718Ascot Ins U.S. Group01891587,18932.61.91.60.862.057.839.714.9 1817Sompo Hldgs US Group01887879,3228.41.71.81.865.259.166.81.2 1921Nationwide Group00598774,97146.31.61.20.375.277.068.20.4 2019Farmers Ins Group00003264,1705.11.41.51.549.369.272.10.3 2120Hanover Ins Group Prop & Cas Cos00486152,429-1.31.11.31.234.932.731.41.0 2223Argo Group00401948,87016.51.11.00.735.138.246.42.4 2322RLI Group00388348,81715.11.11.01.049.144.153.93.7 2429Swiss Reins Group00326245,82136.01.00.81.047.625.435.51.8 2527MS&AD US Ins Group01878245,75921.21.00.90.876.543.545.68.2 Top 25 Writers$4,213,33111.190.590.991.452.355.357.41.3 Total U.S. P/C Industry$4,653,09211.5100.0100.0100.052.555.058.40.6 Note: Data for some companies in this report has been received from the NAIC. Reflects Grand Total (includes Canada and U.S. Territories). Source: — State/Line (P/C Lines) - P/C, US; data as of Oct. 10, 2022. Best’s Rankings Top 25 US Inland Marine Writers – 2022 Edition Ranked by 2021 direct premiums written. ($ Thousands) 2021 Rank 2020 RankCompany / GroupAMB# 2021 Direct Premiums Written % Change in Premiums Market Share (%)Adjusted Loss Ratios % of Company Premiums202120202019202120202019 11Liberty Mutual Ins Cos000060$4,077,5314.913.715.014.464.873.266.59.8 22CNA Ins Cos0183133,637,5083.112.213.613.354.666.858.028.9 33Chubb INA Group0184981,743,34114.15.95.95.153.479.750.76.4 48Allianz US PC Ins Companies0184291,401,63366.44.73.34.839.1108.341.925.3 54Amer Intl Group 0185401,385,36625.44.74.36.28.939.241.69.4 67Nationwide Group0059871,145,18719.63.83.73.368.669.564.75.9 75Assurant P&C Group0185231,105,6135.73.74.04.434.433.540.412.3 89Zurich Ins US PC Group018549977,28228.93.32.92.631.837.528.86.5 96FM Global Group018502809,406-17.72.73.84.5122.779.232.914.4 1010Travelers Group018674788,7385.02.72.92.946.451.048.22.6 1112Progressive Ins Group000780721,67927.62.42.21.837.650.542.21.5 1211State Farm Group000088721,6246.42.42.62.544.444.942.61.0 1314Trupanion Ins Group018971634,80838.42.11.81.365.365.765.2100.0 1413XL America Companies018557518,2937.91.71.91.546.063.263.96.7 1516Markel Corp Group018468502,21137.31.71.41.339.247.348.16.8 1615Great Amer P & C Ins Group004835428,17512.61.41.51.342.540.334.85.6 1717Fairfax Financial (USA) Group003116395,04328.61.31.21.658.666.461.64.1 1831Starr Intl Group018756344,41988.51.20.70.419.353.368.17.5 1919Old Republic Ins Group000734337,19613.01.11.21.222.430.631.26.5 2020Hanover Ins Group Prop & Cas Cos004861335,59016.51.11.11.040.241.046.56.2 2124Fortegra P&C Group018686313,73537.01.10.90.911.511.66.830.2 2218USAA Group004080307,6651.91.01.21.230.825.229.91.2 2329Munich-Amer Hldg Corp Cos018753295,86547.01.00.80.548.249.348.59.1 2425OH Indemnity Co004813282,89025.81.00.90.648.751.051.559.0 2526Berkshire Hathaway Ins000811281,34626.00.90.91.260.455.652.70.5 Top 25 Writers$23,492,14413.678.879.781.050.661.150.65.5 Total U.S. P/C Industry$29,817,68414.9100.0100.0100.049.363.849.03.7 Note: Data for some companies in this report has been received from the NAIC. Reflects Grand Total (includes Canada and U.S. Territories). Source: — State/Line (P/C Lines) - P/C, US; data as of Oct. 3, 2022.Best’s Rankings 54BEST’S REVIEW • DECEMBER 2022 Best’s Rankings Top 25 US Fire and Allied Writers – 2022 Edition Ranked by 2021 direct premiums written. ($ Thousands) 2021 Rank 2020 RankCompany / GroupAMB# 2021 Direct Premiums Written % Change in Premiums Market Share (%)Adjusted Loss Ratios % of Company Premiums202120202019202120202019 11Zurich Ins US PC Group018549$4,739,01421.77.67.37.269.1113.784.331.6 22Chubb INA Group0184984,287,09028.86.86.26.581.283.959.915.8 33FM Global Group0185023,930,20820.46.36.15.261.848.550.970.1 44Sompo Hldgs US Group0188783,483,70021.95.65.45.382.0105.4104.253.0 56QBE North America Ins Group0056583,245,82848.15.24.14.082.593.392.051.5 65Amer Intl Group 0185402,970,23812.54.74.95.060.685.164.520.1 77Travelers Group0186741,961,6919.53.13.43.452.640.357.96.3 89Liberty Mutual Ins Cos0000601,904,33719.03.03.03.263.971.151.24.6 98Assurant P&C Group0185231,725,7761.72.83.23.642.234.039.919.2 1010Farmers Ins Group0000321,426,16810.42.32.42.657.250.144.15.7 1111Berkshire Hathaway Ins0008111,397,09924.72.22.11.760.755.650.32.7 1215Fairfax Financial (USA) Group0031161,359,62434.82.21.91.876.894.768.714.2 1312Great Amer P & C Ins Group0048351,310,71423.72.12.02.263.567.383.517.3 1416Tokio Marine US PC Group0187331,161,85126.41.91.71.865.674.091.611.3 1513Allianz US PC Ins Companies0184291,133,38911.21.81.91.880.481.450.620.4 1619FMH Ins Group0181711,127,90036.51.81.61.850.277.9101.998.7 1714XL America Companies018557973,055-4.41.61.91.944.1107.784.812.5 1822Starr Intl Group018756901,50926.21.41.31.084.270.574.519.7 1918CA Earthquake Authority012534901,2856.81.41.61.70.0-0.30.0100.0 2017USAA Group004080890,8681.51.41.61.863.349.753.23.5 2123Alleghany Corp Group018640758,54115.61.21.21.149.470.136.228.5 2220Wright National Flood Insurance Company012582747,3842.61.21.41.544.625.448.9100.0 2325Nationwide Group005987730,95416.41.21.21.280.267.841.53.8 2426Munich-Amer Hldg Corp Cos018753714,09219.51.11.11.066.163.247.722.1 2524Selective Ins Group003926711,15611.11.11.21.262.253.443.219.4 Top 25 Writers$44,493,47119.270.969.969.765.574.067.513.3 Total U.S. P/C Industry$62,711,87317.4100.0100.0100.066.069.161.57.9 Reflects Grand Total (includes Canada and U.S. Territories). Source: —State/Line (P/C Lines) - P/C, US; data as of Oct. 10, 2022. Get a fresh perspective on the global insurance industry with AM Best’s comprehensive news and research service. With a new name and a new look, this streamlined resource delivers fast, efficient navigation to the real-time news, research and thought leadership you need to make informed decisions. Best’s News & Research Service was formerly known as Best’s Insurance News & Analysis. Contact customer_support@ambest.com with subscription questions. STAY UP TO SPEED WITH BEST’S NEWS & RESEARCH SERVICE 22.BNRS18D Our Insight, Your Advantage ™ Learn More: sales@ambest.com 333Ȑ ) !/0Ȑ +)ˏȼˏȬȏȅȎȭˏȊȈȏȥȇȇȅȅ55BEST’S REVIEW • DECEMBER 2022 Best’s Rankings US Fire and Allied Lines - Top Writers by State, Canada and US Territories - 2021 – 2022 Edition Ranked by 2021 direct premiums written. ($ Thousands) State 2021 Rank 2020 Rank No. of Cos. Direct Premiums Written % of Grand Total % Change in PremiumsALR 1 DDCCE 2 Market Share Leading Writer % Market ShareSecond Leader % Market Share Agency Writer 3 Direct Writer 4 AL3131468$735,2611.220.597.03.777.522.6Chubb INA Group 7.0Zurich Ins US PC Group 5.7 AK4746247143,1030.2-3.842.41.553.846.2FM Global Group 15.9Western Natl Ins Group 13.8 AZ3635487529,6400.86.764.01.371.128.9Zurich Ins US PC Group 7.9Chubb INA Group 7.5 AR3332452631,8911.014.383.81.065.934.1Farm Bureau Mutual Ins Co of Arkansas 8.8Sompo Hldgs US Group 7.7 CA114866,951,73911.112.031.91.374.925.1CA Earthquake Authority 13.0FM Global Group 7.3 CO2627467895,0821.418.876.01.374.026.0Chubb INA Group 10.3Zurich Ins US PC Group 9.6 CT3939430424,6080.77.537.21.469.930.1FM Global Group 8.2Zurich Ins US PC Group 6.5 DE5052386110,1490.217.020.30.381.118.9Zurich Ins US PC Group 17.7Selective Ins Group 8.8 DC5250333107,8260.2-0.641.41.773.626.4FM Global Group 16.6Travelers Group 13.3 FL324776,620,88310.613.625.23.090.49.6Citizens Property Ins Corporation 8.4Assurant P&C Group 7.1 GA16125351,243,1052.015.854.71.474.725.3Sompo Hldgs US Group 10.5FM Global Group 7.1 HI4141262368,8770.627.917.50.992.17.9Heritage Ins Hldgs Group 14.7Tokio Marine US PC Group 12.4 ID4444406266,7770.420.3114.10.780.619.4Chubb INA Group 17.7QBE North America Ins Group 14.8 IL555452,353,0863.830.747.80.980.119.9Great Amer P & C Ins Group 9.4Zurich Ins US PC Group 9.3 IN17205021,242,0312.028.927.60.682.117.9QBE North America Ins Group 9.5Sompo Hldgs US Group 8.7 IA8144531,632,3442.652.138.50.191.48.6Chubb INA Group 16.2FMH Ins Group 13.4 KS10174651,394,0772.231.744.60.286.613.4Zurich Ins US PC Group 15.7Chubb INA Group 11.3 KY3233463649,2631.020.495.61.671.128.9Sompo Hldgs US Group 11.7Zurich Ins US PC Group 9.9 LA984291,506,2082.417.6398.49.878.022.0Sompo Hldgs US Group 6.6Wright National Flood Insurance Company 6.5 ME4949360140,5060.214.025.60.565.334.7FM Global Group 12.6Chubb INA Group 6.4 MD3737460510,2170.810.434.81.372.927.1FM Global Group 8.6Travelers Group 8.4 MA2825439866,6911.410.926.81.675.824.2FM Global Group 10.5Travelers Group 6.8 MI2424467933,0001.516.665.31.478.621.4Zurich Ins US PC Group 8.8Auto-Owners Ins Group 6.4 MN774491,722,5322.726.563.40.590.89.3Zurich Ins US PC Group 18.0QBE North America Ins Group 10.9 MS3434433588,8480.911.277.91.771.928.2Sompo Hldgs US Group 16.6Liberty Mutual Ins Cos 6.5 MO15154811,250,7102.017.549.01.074.625.4Chubb INA Group 17.7Zurich Ins US PC Group 6.7 MT4243372347,3130.630.7155.70.387.212.8Chubb INA Group 25.6QBE North America Ins Group 24.6 NE12184221,331,0872.135.551.00.293.76.4Zurich Ins US PC Group 20.3QBE North America Ins Group 16.1 NV4040431388,6320.620.850.22.368.231.8QBE North America Ins Group 14.3FM Global Group 10.7 NH5151381108,2790.214.221.61.568.631.4FM Global Group 10.4Zurich Ins US PC Group 6.8 NJ19134641,164,0581.98.599.43.180.119.9Selective Ins Group 7.9Zurich Ins US PC Group 7.0 NM4545408259,3400.418.093.20.574.525.5Sompo Hldgs US Group 12.1Amer Intl Group 11.8 NY445172,408,7493.87.842.82.576.623.4FM Global Group 8.6Travelers Group 7.6 NC1494901,268,7662.013.297.30.874.825.2Zurich Ins US PC Group 9.8QBE North America Ins Group 6.4 ND13163791,294,6622.122.3135.90.193.76.3QBE North America Ins Group 26.9Chubb INA Group 21.6 OH11105321,340,2972.120.737.91.079.320.7Zurich Ins US PC Group 10.0FM Global Group 7.9 OK2930435794,5551.323.785.22.471.728.3Sompo Hldgs US Group 9.7QBE North America Ins Group 7.5 OR3536437579,7630.921.762.60.768.331.7QBE North America Ins Group 9.7FM Global Group 8.3 PA18115821,197,9681.99.960.92.172.527.5FM Global Group 9.6Travelers Group 7.0 RI4648366144,0480.211.340.42.071.528.6FM Global Group 8.0Zurich Ins US PC Group 6.1 SC2221480975,7731.610.021.31.170.030.0Berkshire Hathaway Ins 13.0Chubb INA Group 9.0 SD21263831,036,6381.736.483.20.195.64.4Chubb INA Group 28.6QBE North America Ins Group 15.7 TN2323516945,5111.515.271.51.563.936.1FM Global Group 10.2Sompo Hldgs US Group 7.6 TX235506,653,09210.618.0107.02.580.519.5Sompo Hldgs US Group 10.4Chubb INA Group 5.8 UT4342437325,8320.516.830.00.761.938.1FM Global Group 14.1Amer Intl Group 6.2 VT545335073,1940.1-21.030.82.369.930.1Allianz US PC Ins Companies 16.1FM Global Group 8.3 VA3029500752,8281.27.034.50.970.429.6Zurich Ins US PC Group 10.4USAA Group 8.8 WA20194511,115,9281.814.091.01.068.631.5Zurich Ins US PC Group 9.1FM Global Group 8.9 WV4847384140,8720.24.138.82.166.233.8FM Global Group 8.3Liberty Mutual Ins Cos 7.5 WI2728475878,2411.419.341.30.784.615.4Zurich Ins US PC Group 13.6QBE North America Ins Group 9.0 WY5354369103,3750.220.134.00.573.326.7QBE North America Ins Group 16.2FM Global Group 8.1 Amer. Samoa 5858580.0-96.8-100.0-90.897.82.2Tokio Marine US PC Group 97.8FM Global Group 2.2 Guam 55563953,7490.11.44.80.399.60.4DB Ins US Group 43.8Aioi Nissay Dowa Ins Co Ltd. GUO *** 13.1 Puerto Rico383890462,3870.76.410.02.585.114.9MAPFRE North America Group 22.7Multinational Ins Co 13.0 U.S. Virgin Is.56555447,0460.1-24.115.43.794.35.7Underwriters at Lloyd's, London (VI)72.6Guardian Ins Group 9.2 Canada252252901,4401.48.435.80.932.867.2FM Global Group 45.7Swiss Reins Group 14.5 Other 66951,794,4142.921.065.71.173.426.6Fairfax Financial (USA) Group 48.4Chubb INA Group 14.6 N. Mariana Is.5757115,5720.026.3516.20.8100.00.0First Net Ins Co 57.6DB Ins US Group 36.9 Grand Total1,304$62,711,873100.017.466.01.778.921.1Zurich Ins US PC Group 7.6Chubb INA Group 6.8 Note: Data for some companies in this report has been received from the NAIC. 1. ALR: Adjusted loss ratio is direct losses incurred divided by the difference between direct premium earned and dividends paid to policyholder. 2. DDCCE: Direct defense and cost containment expense ratio is the former allocated loss adjustment expense (ALAE) ratio. 3. Insurers that distribute primarily through independent agents. 4. Insurers that distribute primarily through a direct-selling system or an exclusive agency system. Source: —State/Line (P/C Lines) - P/C, US; data as of Oct. 10, 2022.Best’s Rankings 56BEST’S REVIEW • DECEMBER 2022 Best’s Rankings Top 25 US Surplus Lines Insurers – 2022 Edition Ranked by 2021 direct premiums written. ($ Thousands) RankAMB#Company Surplus Lines DPW Surplus Lines Market Share (%) 1002428National Fire & Marine Ins Co$3,406,7744.1 2003292Scottsdale Insurance Company2,544,3153.0 3002350Lexington Insurance Company2,350,9062.8 4003759Evanston Insurance Company2,056,5842.5 5011340Indian Harbor Insurance Co1,905,0742.3 6013033Endurance American Spec Ins Co1,624,5661.9 7013977Starr Surplus Lines Ins Co1,440,3731.7 8003535AIG Specialty Insurance Co1,435,2461.7 9004433Westchester Surplus Lines Ins1,390,3711.7 10012562QBE Specialty Insurance Co1,284,5411.5 11013105United Specialty Insurance Co1,257,7291.5 12013866Ironshore Specialty Ins Co1,244,5411.5 13012515AXIS Surplus Insurance Company1,243,9361.5 14003557Steadfast Insurance Company1,193,7881.4 15012619Landmark American Ins Co1,138,3861.4 16012096Everest Indemnity Insurance Co1,063,4661.3 17011123Crum & Forster Specialty Ins1,039,5131.2 18003538Columbia Casualty Company1,029,0611.2 19012078Liberty Surplus Ins Corp964,2791.2 20012523Arch Specialty Insurance Co963,3581.2 21012118Gemini Insurance Company878,5341.1 22003510Illinois Union Insurance Co826,2061.0 23012604James River Insurance Co820,5011.0 24003286Houston Casualty Company799,9951.0 25003837Great American E & S Ins Co789,0370.9 Top 25 Insurers$34,691,08042.0 Total U.S. Surplus Lines Market$82,652,576100.0 Source: AM Best data and research 57BEST’S REVIEW • DECEMBER 2022 AM Best: Inflation Will Impact Insurance in 2023, but Expect Moderation Three AM Best analysts discuss expectations of a hard market, and in commercial lines, most of the premium growth will come from price increases due to the impact of social inflation and economic inflation. by Tom Davis I nflation will impact insurers in 2023, but the industry shouldn’t expect the same “acceleration” that’s hit other parts of the economy because it’s taken steps to keep itself stable in recent years, according to AM Best. Three AM Best analysts spoke about how the insurance market will continue to harden in 2023 but in moderation. Participants included Ann Modica, associate director and senior economist; Sridhar Manyem, director of industry research and analytics; and David Blades, associate director. Following is an edited transcript of the interview. So what is the outlook for the insurance industry next year? Modica: Everything is based on the economy, which is expected to slow to 1.6% in 2022 and Tom Davis is managing editor. He can be reached at tom.davis@ambest.com. What AM Best SaysNext >