< PreviousBest’s Rankings 48BEST’S REVIEW • NOVEMBER 2022 Best’s Rankings US Homeowners Multiple Peril – 2021 Top 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 11State Farm Group000088$22,046,15511.818.417.817.968.771.558.831.4 22Allstate Ins Group00000810,500,6307.48.88.89.273.454.951.925.4 33Liberty Mutual Ins Cos0000608,382,68210.27.06.96.968.060.751.920.2 44USAA Group0040807,988,4458.56.76.76.676.869.268.431.6 55Farmers Ins Group0000327,608,0356.46.46.56.871.071.740.930.4 66Travelers Group0186745,557,12114.24.64.44.165.960.555.818.0 77Amer Family Ins Group0001245,001,63212.64.24.03.962.462.361.839.8 88Nationwide Group0059873,522,3945.32.93.03.172.575.457.518.1 99Chubb INA Group0184983,210,8743.12.72.82.961.256.462.511.8 1010Progressive Ins Group0007802,217,18816.91.91.71.677.377.267.04.6 1112Erie Ins Group0042831,956,1848.11.61.61.763.962.268.524.9 1211Auto-Owners Ins Group0043541,915,9414.71.61.71.761.162.556.219.3 1313Universal Ins Hldgs Group0187521,582,35210.51.31.31.266.667.282.394.7 1424Citizens Property Ins Corporation0117121,260,86668.11.10.70.544.448.173.869.5 1514Amer Intl Group 0185401,068,007-3.80.91.01.1-13.548.086.37.2 1621Tokio Marine US PC Group0187331,057,31226.90.90.80.776.057.967.710.3 1715CSAA Ins Group0184601,053,6857.40.90.90.961.177.825.125.1 1816Amica Mutual Group018522964,2741.60.80.90.973.563.057.342.4 1919Heritage Ins Hldgs Group018891915,5201.50.80.80.857.753.763.678.1 2018Hartford Ins Group000048909,829-1.80.80.80.946.610.344.06.7 2120Auto Club Enterprises Ins Group018515890,8404.20.70.80.864.242.052.419.1 2217United Ins Group018881814,525-12.90.70.90.8109.084.267.160.7 2328Mercury Gen Group004524810,34320.30.70.60.661.462.653.320.9 2423Assurant P&C Group018523809,2857.30.70.70.744.749.938.69.0 2522COUNTRY Financial PC Group000302792,2125.00.70.70.759.779.965.228.4 Top 25 Writers$92,836,3319.477.576.877.067.764.857.021.5 Total U.S. P/C Industry$119,802,8968.4100.0100.0100.069.266.858.515.0 Note: Data for some companies in this report has been received from the NAIC. Reflects Grand Total (includes Canada and U.S. Territories). Source: – State/Line (P/C Lines) - P/C, US; data as of Sept. 15, 2022. FIND OUT WHAT INSURANCE INDUSTRY EVENTS ARE ON THE HORIZON Best’s Calendar is a complimentary online resource that provides important information on insurance industry meetings, webinars and conferences. Easily find any event by name, organization, date, description or venue using our advanced search features. Scan the QR code to see upcoming events and get the latest conference information. 22.BC001G Our Insight, Your Advantage ™ Learn More: news@ambest.com www.ambest.com • (908) 439-220049BEST’S REVIEW • NOVEMBER 2022 Best’s Rankings US Homeowners Multiple Peril – Top Writers by State, Canada and US Territories – 2021 – 2022 Edition Ranked by 2021 direct premiums written. ($ Thousands) State 2021 Rank 2020 Rank No of Cos Direct Premiums Written % of Grand Total % Premium ChangeALR 1 DDCCE 2 Market Share Leading Writer % Market ShareSecond Leader % Market Share Agency Writer 3 Direct Writer 4 AL2223240$2,126,2181.89.156.71.124.975.1State Farm Group 27.6Alfa Ins Group 13.0 AK505187192,2740.27.847.91.09.490.6State Farm Group 33.3USAA Group 19.7 AZ24242522,064,2991.78.771.11.527.172.9State Farm Group 16.9Farmers Ins Group 12.7 AR31312071,103,8090.98.067.30.920.279.8State Farm Group 26.6Farm Bureau Mutual Ins Co of Arkansas 13.3 CA3325611,166,3469.312.443.32.630.469.6State Farm Group 19.4Farmers Ins Group 14.8 CO10122233,264,6412.710.991.91.321.478.6State Farm Group 21.0Liberty Mutual Ins Cos 13.6 CT27262291,712,8281.45.451.51.353.047.0Travelers Group 8.7Liberty Mutual Ins Cos 8.6 DE4545189342,4040.39.444.51.036.363.7State Farm Group 25.6Liberty Mutual Ins Cos 10.1 DC5150164188,2910.24.950.50.852.447.6Travelers Group 22.0State Farm Group 20.4 FL1126012,405,28610.411.756.57.180.919.1Universal Ins Hldgs Group 10.5Citizens Property Ins Corporation 10.2 GA662964,091,7593.47.962.41.128.771.3State Farm Group 25.5Allstate Ins Group 13.2 HI4443101422,3770.4-3.741.92.143.156.9State Farm Group 35.5Tokio Marine US PC Group 12.9 ID3841182516,5360.413.072.51.224.575.5Liberty Mutual Ins Cos 16.5State Farm Group 15.6 IL552974,441,4383.77.862.51.221.978.1State Farm Group 33.5Allstate Ins Group 12.7 IN18182612,308,4361.97.464.61.233.666.4State Farm Group 24.3Allstate Ins Group 9.1 IA3333224979,9650.89.696.51.140.859.2State Farm Group 25.7Nationwide Group 11.3 KS28282271,383,6251.26.457.00.726.074.0State Farm Group 21.1Amer Family Ins Group 15.2 KY29292181,360,2091.16.085.51.324.076.0State Farm Group 24.7KY Farm Bureau Group 20.3 LA21212232,142,7611.84.0412.18.938.161.9State Farm Group 25.7Allstate Ins Group 11.4 ME3939182496,9160.45.633.10.746.054.0State Farm Group 12.3Liberty Mutual Ins Cos 11.3 MD20192222,224,3641.96.464.91.442.357.7State Farm Group 17.2USAA Group 12.1 MA14132822,808,0372.34.838.41.474.825.2MAPFRE North America Group 12.2Liberty Mutual Ins Cos 9.2 MI11102173,192,3402.75.573.61.238.161.9State Farm Group 17.1Auto-Owners Ins Group 14.1 MN15152342,646,0822.28.574.20.930.369.7State Farm Group 26.4Amer Family Ins Group 15.0 MS30302031,172,0201.09.155.71.324.675.5State Farm Group 25.2Southern Farm Bureau Casualty Group 15.1 MO17162272,499,9282.17.251.70.919.680.4State Farm Group 25.4Amer Family Ins Group 15.2 MT4344158459,0770.412.253.20.923.077.0State Farm Group 24.5Liberty Mutual Ins Cos 15.4 NE3434193954,2840.89.154.90.634.665.4State Farm Group 23.2Farmers Mutual Ins Co of Nebraska 10.7 NV3535219770,6730.68.555.61.625.574.5State Farm Group 18.8Farmers Ins Group 12.8 NH4242202479,8660.45.541.10.842.757.3Liberty Mutual Ins Cos 13.5State Farm Group 10.3 NJ12112653,120,6562.65.169.42.138.062.0Allstate Ins Group 11.9State Farm Group 10.7 NM3737201660,5500.67.855.81.121.578.5State Farm Group 20.7Farmers Ins Group 17.6 NY442886,246,8485.26.655.31.852.947.2Allstate Ins Group 16.4State Farm Group 13.6 NC992503,322,1622.87.050.80.942.957.1State Farm Group 16.7North Carolina Farm Bureau Ins Group 12.3 ND4847178259,9330.27.663.10.828.371.7State Farm Group 15.1Amer Family Ins Group 12.6 OH882963,379,0702.86.853.41.243.456.6State Farm Group 21.3Allstate Ins Group 10.7 OK25252151,966,0531.67.366.81.417.482.6State Farm Group 29.0Farmers Ins Group 16.3 OR32322051,062,5840.99.060.11.219.880.2State Farm Group 22.1Farmers Ins Group 15.5 PA773183,886,7863.26.560.91.947.252.9State Farm Group 17.8Erie Ins Group 15.1 RI4140195494,9360.47.253.61.545.654.4Amica Mutual Group 15.2Allstate Ins Group 12.3 SC23222502,108,2261.87.240.51.146.553.5State Farm Group 20.4USAA Group 9.3 SD4646184329,9760.310.757.90.435.964.1State Farm Group 20.1Amer Family Ins Group 12.4 TN16172542,504,9852.18.561.11.227.572.5State Farm Group 23.9TN Farmers Ins Cos 18.0 TX2231111,876,3289.99.6104.72.232.267.9State Farm Group 18.3Allstate Ins Group 13.4 UT3636197734,1650.611.663.41.332.867.2State Farm Group 16.6Farmers Ins Group 11.9 VT4949183229,2420.24.640.90.757.942.1VT Mutual Group 12.1Liberty Mutual Ins Cos 12.0 VA13142862,834,2402.47.450.31.138.861.2USAA Group 18.5State Farm Group 17.3 WA19202312,251,7921.98.563.91.527.073.1State Farm Group 17.7Liberty Mutual Ins Cos 13.0 WV4038185496,0520.45.047.71.443.556.5State Farm Group 26.8Erie Ins Group 18.2 WI26272611,716,7711.47.260.91.241.558.5Amer Family Ins Group 22.4State Farm Group 17.0 WY4748163261,4820.29.948.30.118.082.0State Farm Group 22.4Farmers Ins Group 18.3 Guam 53531419,7340.00.96.50.896.53.5Chung Kuo Ins Co, Ltd GUB 36.2Amer Intl Group 24.1 Puerto Rico525223107,9020.115.213.22.999.40.7Universal Ins Group of Puerto Rico 51.3MAPFRE North America Group 33.3 U.S. Virgin Is.54542411,6420.0-5.622.93.297.82.2Underwriters at Lloyd's, London (VI) 64.6Guardian Ins Group 24.4 Canada575714300.0-38.2-99.9-99.90.0100.0FM Global Group 100.0Hartford Ins Group 0.0 Other 5555343,3220.0-59.8106.2-9.7100.00.0Chubb INA Group 72.7Amer Intl Group 25.8 N. Mariana Is.565653420.0-1.4-9.5-2.0100.00.0Tokio Marine US PC Group 48.7First Net Ins Co 25.3 Grand Total1,081 $119,802,896 100.08.469.22.239.860.2State Farm Group 18.4Allstate Ins Group 8.8 1. ALR: Adjusted loss ratio is direct losses incurred divided by the difference between direct premium earned and dividends paid to policyholder. 2. DDCCE: Direct defense and cost containment expense ratio is the former allocated loss adjustment expense (ALAE) ratio. 3. Insurers that distribute primarily through independent agents. 4. Insurers that distribute primarily through a direct-selling system or an exclusive agency system. Note: Data for some companies in this report has been received from the NAIC. Source: – State/Line (P/C Lines) - P/C, US; data as of Sept. 15, 2022.Best’s Rankings 50BEST’S REVIEW • NOVEMBER 2022 Best’s Rankings US Property/Casualty – 2021 Asset Distribution – 2022 Edition Ranked by 2021 total admitted assets. ($ Millions) 2021 Rank 2020 RankCompany/GroupAMB# Nonaffiliated Bonds % of Assets Nonaffiliated Common Stocks % of Assets Affiliated Bonds & Stocks % of Assets Cash & Short-Term Investments % of Assets Total Admitted Assets Gross Yield on Invested Assets 202120202019 11Berkshire Hathaway Ins000811$7,7371.5$305,74658.6$25,9255.0$76,78114.7$521,8352.33.03.6 22State Farm Group000088112,58444.695,40737.815,8756.32,9411.2252,5682.32.52.8 33Liberty Mutual Ins Cos00006059,17751.82,3142.08,5017.43,6223.2114,3423.72.83.5 44Travelers Group01867468,94274.91630.21,5451.71,4331.692,0063.83.53.9 55Chubb INA Group01849855,61866.43,6274.3700.1-1,123-1.383,7883.84.04.1 67Allstate Ins Group00000834,43250.75,0517.41,1021.62,2833.467,9806.93.53.9 76Amer Intl Group 01854040,33160.41940.31,1421.71,7552.666,7544.23.64.1 89Progressive Ins Group00078040,30962.94,9927.88511.36321.064,0992.12.53.2 98USAA Group00408025,36543.16,27010.712,09920.6-88-0.258,8132.83.33.3 1010Nationwide Group00598721,26036.7970.27,65513.25731.057,8813.22.93.5 1111Hartford Ins Group00004830,80961.59211.81650.31,3982.850,1283.83.74.2 1212CNA Ins Cos01831336,25677.92330.57971.71,2822.846,5295.34.85.2 1313Farmers Ins Group00003222,81155.78852.280.04431.140,9342.73.33.9 1415Tokio Marine US PC Group01873321,78364.51660.51,1253.38102.433,7664.84.64.7 1514Zurich Ins US PC Group01854918,16053.91,1623.400.02280.733,7123.13.33.4 1616Fairfax Financial (USA) Group0031164,77915.41,5204.93,48911.210,37033.331,0942.22.42.6 1719Amer Family Ins Group00012416,83357.32,7689.41,0853.77642.629,3583.57.75.3 1817Swiss Reins Group00326217,89662.25291.800.01,5285.328,7761.72.02.8 1918Auto-Owners Ins Group00435419,31267.24,03614.07232.52730.928,7372.52.72.9 2020FM Global Group0185027,89128.59,54334.52,6669.61,2194.427,6941.61.62.2 2122Munich-Amer Hldg Corp Cos01875317,48367.4980.41060.48913.425,9541.92.63.0 2221W. R. Berkley Ins Group01825213,74753.31,8517.21,4275.55742.225,8063.24.53.2 2323Erie Ins Group00428311,89150.24,60219.44391.97773.323,6703.83.23.7 2425Alleghany Corp Group01864014,24262.72,63711.69804.39134.022,7232.62.62.9 2527Everest Re US Group00569611,82953.56933.15502.51,0524.822,1134.02.95.3 Top 25 Insurers$731,47839.5$455,50424.6$88,3264.8$111,3296.0$1,851,0593.03.23.6 Total U.S. P/C Industry$1,215,32145.8$545,76620.6$97,3013.7$161,0456.1$2,655,7933.03.13.5 Source: — Statement File - P/C, US; data as of Aug. 15, 2022. FIND MORE CORPORATE CHANGES IN AM Best’s Powerful, Flexible Online Platform for Best’s Credit Ratings • Financial Data • Credit Analysis 22.BLINK006C2 Our Insight, Your Advantage ™ Learn More: sales@ambest.com www.ambest.com • (908) 439-220051BEST’S REVIEW • NOVEMBER 2022 Best’s Rankings Top 50 Global Reinsurers – 2022 Edition Ranked by unaffiliated gross premiums written in 2021. (USD Millions) 1 RankCompany Name Reinsurance Premiums Written Total Sharholders’ Funds 2 Ratios 3 Life & Non-LifeNon-Life Only GrossNetGrossNetLossExpenseCombined 1Munich Reinsurance Company46,83644,41732,61031,48235,04768.730.999.6 2Swiss Re Ltd. 39,20236,96523,13122,38123,67867.429.797.1 3Hannover Rück SE 4 31,44327,34421,77318,82714,44769.328.798.0 4Canada Life Re23,54723,514N/AN/A23,854N/AN/AN/A 5SCOR S.E.19,93316,2429,3197,9397,25172.028.6100.6 6Berkshire Hathaway Inc.19,90619,90614,28514,285514,93071.923.395.1 7Lloyd's 5, 6 19,34314,26319,34314,26348,24265.829.495.2 8China Reinsurance (Group) Corporation17,80816,1816,9566,60816,10466.628.495.1 9Reinsurance Group of America Inc.13,34812,513N/AN/A13,014N/AN/AN/A 10Everest Re Group Ltd.9,0678,5369,0678,53610,13971.626.598.1 11PartnerRe Ltd.8,2047,1346,5575,5117,54464.625.990.5 12RenaissanceRe Holdings Ltd.7,8345,9397,8345,9397,07874.627.5102.1 13Korean Reinsurance Company7,1455,1026,0434,0782,12686.414.2100.6 14Transatlantic Holdings, Inc6,0345,3876,0345,3875,39869.230.299.5 15General Insurance Corporation of India 7 5,8215,1725,6304,9877,93888.819.3108.1 16AXA XL5,4804,3135,4804,31313,13972.631.2103.8 17Arch Capital Group Ltd.5,0943,2545,0943,25413,54667.826.494.2 18MS&AD Insurance Group Holdings, Inc. 7, 8, 11 4,393N/A4,393N/A14,668N/AN/A97.7 19Pacific LifeCorp4,0983,620N/AN/A17,005N/AN/AN/A 20Sompo International Holdings, Ltd.3,8553,4173,8553,4177,43363.529.593.1 21MAPFRE RE, Compañía de Reaseguros S.A. 10 3,7193,1653,0802,5342,03569.328.798.1 22Assicurazioni Generali SpA3,6703,6701,2421,24236,10183.527.9111.4 23R+V Versicherung AG 9 3,4213,4213,4213,4212,43576.026.3102.2 24Validus Reinsurance, Ltd.3,1712,4523,1712,4523,54872.428.6101.0 25The Toa Reinsurance Company, Limited 7, 8 2,9882,4532,1271,6902,61477.632.5110.2 26Liberty Mutual 12 2,945N/A2,945N/A27,84862.033.295.2 27Odyssey Group Holdings, Inc.2,8422,7092,8422,7095,22075.124.9100.0 28AXIS Capital Holdings Limited2,8232,0322,8232,0325,41173.226.599.7 29Taiping Reinsurance Co. Ltd 8 2,3392,0511,4471,2291,50771.032.9103.9 30Peak Reinsurance Company Ltd2,1451,7941,8991,5911,47075.826.2102.1 31Caisse Centrale de Réassurance2,1441,9641,9681,7923,19150.016.866.9 32Qianhai Reinsurance Co., Ltd.1,9941,15441035052175.525.1100.5 33QBE Insurance Group Limited1,6621,4821,6621,4828,88266.66.172.8 34Aspen Insurance Holdings Limited1,5971,1991,5971,1992,77563.030.693.6 35Deutsche Rückversicherung AG1,5771,0421,4751,00035176.329.2105.5 36IRB - Brasil Resseguros S.A.1,5529841,552984644101.530.5132.0 37American Agricultural Insurance Company1,4854661,48546667180.417.397.7 38Tokio Marine & Nichido Fire Insurance Co., Ltd. 7, 11 1,4831,1781,4831,17817,148N/AN/A100.9 39SiriusPoint Ltd.1,3501,1251,3501,1252,50382.633.7116.2 40Fidelis1,2895731,2895732,07884.027.6111.6 41Markel Corporation1,2461,1261,2461,12614,69573.931.4105.3 42W.R. Berkley Corporation 11 1,2281,1191,2281,1196,65361.029.790.7 43Lancashire1,2258161,2258161,41367.641.3108.9 44Allied World Assurance Company Holdings, AG1,2011,1061,2011,1064,79275.425.7101.1 45Chubb Limited 99687399687359,71479.229.4108.6 46African Reinsurance Corporation8456667836121,00156.836.793.5 47Hiscox Ltd8082748082742,53940.829.770.6 48Somers Re Ltd.78370578370594380.623.7104.3 49DEVK Re75969975469414,44776.328.4104.7 50Central Reinsurance Corporation75570264559569867.927.695.5 1 All non-USD currencies converted to USD using foreign exchange rate at company’s fiscal year-end. 2 As reported on balance sheet, unless otherwise noted. 3 Non-Life only. 4 Net premium written data not reported; net premium earned substituted. 5 Lloyd’s premiums are for reinsurance only. Premiums for certain groups in the rankings also may include Lloyd’s Syndicate premiums when applicable. 6 Shareholders’ funds includes Lloyd’s members’ assets and Lloyd’s central reserves. 7 Fiscal year ended March 31, 2022. 8 Net asset value used for shareholders’ funds. 9 Ratios are as reported and calculated on a gross basis. 10 Premium data excludes intergroup reinsurance. 11 Ratios are based on the group’s operations. 12 Ratios are based on Liberty Mutual Insurance Europe SE financial statements. N/A = Information not applicable or not available at time of publication. Source: AM Best data and research Best’s Ranking “Top 50 Global Reinsurers – 2022 Edition,” published on page 56 of the September edition of Best’s Review, was incorrect. The correct information appears in the list below.52BEST’S REVIEW • NOVEMBER 2022 AM Best: Florida Specialists Cede a Growing Amount of Premium to Reinsurers AM Best defines Florida personal property specialists as regional insurers domiciled in Florida with predominant exposures to Florida personal property insurance. Editor’s Note: The following is a Best’s Commentary: Reinsurer Losses Related to Florida Specialists Continue to Climb Despite No Significant Storms. Visit www.ambest.com to access the report. This Commentary was written prior to Hurricane Ian. Principal Takeaways • Florida’s personal property specialists show a significantly higher dependency on reinsurance than the industry average. • Premiums assumed by U.S. (re)insurers from this group have grown roughly 66% the last three years, but losses have increased fourfold over the same period even without significant hurricane activity. • Reinsurance recoverables and ceded premiums among this group were 5.7 times policyholder surplus level in 2021, compared with an industry average of only 0.5 times. The Florida property insurance market has been under immense pressure and faces multiple challenges. The segment’s performance has deteriorated due to the greater frequency of secondary perils (severe thunderstorms, hail), rising reinsurance costs, escalating litigation, and building codes that have been exploited by parties looking to profit. Insurers have been grappling with inadequate rates despite significant rate hikes, and many carriers have dropped customers. Four property insurers domiciled in Florida have been declared insolvent since late February, in addition to a Louisiana-based insurer that wrote policies in Florida. Amid the turmoil, the Florida Office of Insurance Regulation (OIR) announced on July 27 a plan to establish a temporary reinsurance arrangement What AM Best Says WATER, WATER EVERYWHERE: An aerial view of Miami. AM Best reports Florida’s personal property specialists show a significantly higher dependency on reinsurance than the industry average.53BEST’S REVIEW • NOVEMBER 2022 through Citizens Property Insurance Corporation in the event of rating downgrades. The State’s solution may allow insurers to meet an exception offered by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) and ensures Floridians can maintain coverage during hurricane season. Both government entities require that property insurance policies for properties with mortgages they back must be written by an insurer meeting financial rating requirements. Fannie Mae and Freddie Mac each offer an exception to the financial rating requirements for an insurer that is covered by a reinsurer that assumes, by endorsement, 100% of the insurer’s liability for any covered loss payable but unpaid by the insurer because of insolvency. Given the surge in Citizens’ growth on a direct basis, and now its role as a backstop reinsurer, Citizens’ reinsurers may also see additional risk. Eight reinsurers account for over 86% of premium ceded by Citizens, including the Florida Hurricane Catastrophe Fund, which accounts for nearly 44% (Exhibit 1). Everglades Re II Ltd., a special purpose vehicle, is used by Citizens to issue notes to sell to cat bond investors. Excluding Citizens, the aggregate ceded reinsurance leverage (reinsurance recoverables and ceded premiums written to policyholder surplus —a measure of reinsurance dependence) is significantly higher for a group of Florida specialist insurers than industry norms, and only two of these companies’ ratios are below the national personal property composite ratio of 0.5x (Exhibit 2). These Florida personal property companies report significantly elevated dependency ratios, highlighting their sensitivity to reinsurance pricing. Pricing will continue to impact business plans and companies’ ability to use reinsurance structures with adequate limits to protect against severe storms. Insurers that AM Best has identified as Florida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hat AM Best Says 54BEST’S REVIEW • NOVEMBER 2022 specialist insurers continue to cede a growing amount of premium to reinsurers, reaching over $7 billion in 2021. AM Best defines Florida personal property specialists as regional insurers domiciled in Florida with predominant exposures to Florida personal property insurance. Roughly 60% of the premium ceded by our Florida specialist insurer population is reinsured by U.S.-domiciled companies, with more than half the remaining ceded to Bermuda. Additionally, the losses paid by U.S.-domiciled reinsurers have increased fourfold over the last three years, despite fairly moderate hurricane seasons (Exhibit 3). Premium assumed by U.S. (re)insurers has grown roughly 66% the last three years, and the loss ratio has still spiked—again, even without significant hurricane losses over that time, further suggesting that current prices are not adequate to cover the claims inflation and fraud. As such, reinsurers have been pulling back from the Florida property market or significantly raising prices. Excluding the Florida Hurricane Catastrophe Fund, nearly 65% of the reinsurers have a Best’s Financial Strength Rating of “A-” or higher. Because of the significant losses in Florida in recent years, some reinsurers have been evaluating their own aggregate exposures and capital allocation targets. After the Florida Hurricane Catastrophe Fund, Berkshire Hathaway captured the most premium from the Florida specialist companies, roughly 8%, while 10 reinsurers accounted for almost half of the reinsurance (Exhibit 4). Despite increases in assumed premium in recent years, the exposure still accounts for less than 2% of assumed premium for Berkshire Hathaway. Other exposures to Florida property would likely heighten these ratios to some extent, but given that the vast majority of companies have exposures of less than 5% to these companies, total current Florida exposure is still likely manageable for reinsurers. Still, reinsurers are likely to remain selective in the risks they reinsure, placing further burdens on the Florida homeowners market. BR %LOOLRQV ([KLELW /RVVHV3DLGWR)ORULGD6SHFLDOLVW3HUVRQDO3URSHUW\,QVXUHUVE\ 865HLQVXUHUV 6RXUFH $0%HVWGDWDDQGUHVHDUFK ([KLELW 5HLQVXUHU RI)ORULGD 6SHFLDOLVW0DUNHW )ORULGD+XUULFDQH&DWDVWURSKH)XQG %HUNVKLUH+DWKDZD\,QF 0XQLFK5HLQVXUDQFH&RPSDQ\ 6ZLVV5H/WG (YHUHVW5H*URXS/WG $OOLDQ]6( +',9D* $HROXV5H/WG 5HQDLVVDQFH5H+ROGLQJV/WG $UFK&DSLWDO*URXS/WG 7RS 6RXUFH $0%HVWGDWDDQGUHVHDUFK 0LOOLRQV 3UHPLXP&HGHGWR5HLQVXUHUVE\)ORULGD6SHFLDOLVW3HUVRQDO 3URSHUW\,QVXUHUV55BEST’S REVIEW • NOVEMBER 2022 Underwriting & Loss Control Emerging Craft Brewing Industry Presents Unique Range of Risks Best’s Underwriting Reports and Best’s Loss Control Reports provide insight into the lines of coverage, exposures and loss control for craft breweries, microbreweries and brewpubs. The craft brewing industry is an emerging business, and one that can be a cash cow for many states. For example, Wyoming’s state economy was boosted by about $198 million from the craft brewing industry last year, according to reporting by the Cowboy State Daily. But like any other business, the industry brings with it a range of insurance risks, including the sale or sampling of beer on the premises, grain and yeast dusts, specialized machinery and premises requirements, according to Best’s Underwriting & Loss Control Resources. In New Jersey, brewery owners are fighting back against perceived over-regulation from the state’s Division of Alcoholic Beverage Control. Those regulations limit the amount of on-site activities, food service and private parties and events breweries are permitted to have, according to the state’s ABC. The state says the goal is to help microbreweries while balancing the concerns of restaurant and bar owners, noting that a growing number of craft breweries began serving alcohol “well beyond what the limited licenses allowed or ever envisioned.” “This resulted in complaints of unfair competition from bars and restaurant owners who hold licenses allowing full retail privileges,” according to an ABC release. While this battle continues, AM Best explores the insurance risks associated with breweries across the country. Best’s Underwriting Reports identify 11 lines of coverage for craft breweries, microbreweries and brewpubs: Automobile Liability; Automobile Physical Damage; General Liability: Premises and Operations; General Liability: Products - Completed Operations; Liquor Liability; Workers’ Compensation; Crime; Property; Business Interruption; Inland Marine; and Equipment Breakdown. Best’s Hazard Index ranks the risk exposure for the lines of business as Low (1-3), Medium (4-6), High (7-9) and Very High (10). Following are excerpts of the Lines of Coverage reports that have the highest hazard index rankings. Lines of Coverage Liquor Liability The Liquor Liability exposure for craft breweries will be significant. The primary exposure will be the sale or sampling of beer on the premises; craft brewers that do not sell or offer samples of beer on the premises will not face a Liquor Liability exposure. Property The Property exposure for craft breweries will be significant. The most common ignition sources for craft breweries will include faulty wiring, malfunctioning electrical equipment and brewing machinery and possibly smoking. The fire load will consist of raw materials, fuel, packaging materials, paper and trash. Gas fumigants, pesticides, and fungicides stored on the premises will add to the fire load. The possibility of kettle and steam jacket explosions and the presence of grain and yeast dust creates additional special exposures. There may also be a moral hazard. Computers will be covered here. Business Interruption The Business Interruption exposure for microbreweries will be significant due to the wide-ranging use of specialized brewing machinery, the potential for supply disruptions and premises requirements (e.g., sizable brewing systems, multi-floor production areas, warehouses). General Liability: Premises and Operations Craft breweries will have a moderate General Liability: Best’s Hazard Index Line of CoverageBest’s Hazard Index Liquor Liability6 Property6 Business Interruption6 General Liability: Premises and Operations5 Equipment Breakdown556BEST’S REVIEW • NOVEMBER 2022 Underwriting & Loss Control Premises and Operations exposure due to the frequent presence of a number of visitors to the insured’s premises. Visitors will include tour groups, customers, delivery personnel (if distribution services are contracted out), sales representatives from other companies, equipment service and repair contractors, sanitation engineers, pest control applicators, inspectors (e.g., from the Occupational Safety and Health Administration [OSHA] in the United States) and friends and family members of employees. Possible injuries to any visitors allowed access to production areas will include burns, cuts, lacerations and dismemberment. Equipment Breakdown Craft breweries will face a moderate Equipment Breakdown exposure. The severity of this exposure will depend primarily on the extent and scope of the insured’s brewing operations, and the extent of the insured’s heating and cooling systems. The insured will depend on steam pressure vessels in the mashing and brewing processes, as well as on the machinery used to run and power the facility. Loss Control On-Site Inspection: • What are the age, construction and condition of the brewer’s buildings? • Are hazards posed by any adjacent buildings? • Layout of the craft brewery • Are “Employees Only” signs posted at entrances to all areas from which visitors are restricted, such as production, storage and warehouse areas? • Production and packaging equipment: number, age, type, condition. • Boilers: number, age, type, condition Items to Investigate: • What are the dram laws in the state or nation where the insured is located? • To avoid selling alcohol to minors, do alcohol servers verify identification on all patrons of questionable age? • Is the craft brewery more dependent on its location or reputation? • How long would it take the insured to rebuild or repair the premises in the event of a loss? – Anthony Bellano BRING UNSEEN RISKS TO THE SURFACE Expand your knowledge of the businesses and industries you are evaluating with Best’s Underwriting Reports and Best’s Loss Control Reports . Written from an underwriter’s and loss control professional’s perspective, these detailed, yet concise reports include the information you need to efficiently assess risk and exposures. 21.BUG007FA Our Insight, Your Advantage ™ Learn more: sales@ambest.com 333Ȑ ) !/0Ȑ +)ˏȼˏȬȏȅȎȭˏȊȈȏȥȇȇȅȅ For more on this and other risk classifications, visit Best’s Underwriting & Loss Control Resources.57BEST’S REVIEW • NOVEMBER 2022 State Rate Filings Insurers Submit Florida Homeowners Multiperil Filings in First Nine Months of 2022 Filings, based on a disposition date from Jan. 1 to Oct. 1, 2022, show an overall rate impact ranging from an increase of 10.5% to 48.7%. Insurance companies submitted nearly 90 Florida homeowners multiperil filings seeking rate increases with an overall impact of greater than 10%, with a disposition date from Jan. 1 to Oct. 1, 2022. All of the filings were approved. The overall rate impact ranged from an increase of 10.5% to an increase of 48.7%, according to Best’s State Rate Filings. The Florida homeowners insurance market has been in turmoil this year, as insurers have faced escalating litigation costs tied to roof claims and increasing losses from secondary perils such as severe thunderstorms. Litigation has contributed to six insolvencies in Florida this year. The market, already under stress, suffered another serious blow in late September when Hurricane Ian slammed into the southwest Florida coast. Insured STAY AHEAD OF THE CURVE Best’s State Rate Filings ® helps you keep up with US P/C program innovations, find out which competitors are entering which markets, and create targeted product development strategies. 22.BSRF012 Our Insight, Your Advantage ™ Learn More: sales@ambest.com www.ambest.com • (908) 439-2200 Win McNamee/Getty ImagesNext >