Following Their Own Path Dave Raszeja, chief financial officer of Penn Mutual, says a mutual structure’s long-term focus offers a safe haven during volatile economic times. Page 40 AM BEST’S MONTHLY INSURANCE MAGAZINE September 2022 • Volume 123 • Issue 9 www.bestreview.com ISSUES & ANSWERS: Specialty Insurance and Climate Risk Starting on Page 21 Insurers Step Up Private Placement Investments Page 35 Top US Life/Health Insurers Page 52 Top Global Reinsurers Page 56 Best’s Review’s Online ArchivesPhiladelphia Insurance Companies is the marketing name for the property and casualty insurance operations of Philadelphia Consolidated Holding Corp., a member of Tokio Marine Group. All admitted coverages are written by Philadelphia Indemnity Insurance Company. Coverages are subject to actual policy language. Ann D’Amicantonio EVP/Chief Integration Officer Odell Studner PHLY ’ s vehicle telematics program has been a game-changer. ” With more than one billion miles traveled since 2016, PHLYTrac is a proven GPS tracking system that helps organizations correct dangerous driving and lower costs. See real-time updates on driver behavior and fleet conditions. Reduce driver risks like hard braking, hard acceleration, speeding, and more, all while reducing losses by nearly 20%. Get started with PHLYTrac and experience the PHLY difference. Call 800.873.4552 PHLY.com/phlytrac “ AM Best A++ Rating Ward’s Top 50 2001-2022 97.5% Claims Satisfaction 120+ Niche Industries1BEST’S REVIEW • SEPTEMBER 2022 From the Editor’s Desk Mutual Snapshot: Select Life, P/C Insurers Post Double-Digit Growth The September issue includes rankings of the largest life and P/C mutuals, a ranking of the top U.S. private flood insurers, top global reinsurers and leading U.S. life/health writers. Asset management is also a focus. What examples have you seen in which mutual insurers have effectively communicated the benefits of mutuality? Email your answer to bestreviewcomment@ambest.com or scan the QR code to submit your response. Responses will be published in What Readers Say in a future issue. The Question: Mutual insurers represent a significant segment of the insurance industry, providing coverage for many millions of policyholders and yet they tend to fly under the industry radar. Mutual life insurers, for instance, had total admitted assets of $2.1 trillion in 2021 compared with $8.7 trillion for the entire life/health industry, or nearly 25% of the industry’s total admitted assets, according to AM Best data. While stock companies report quarterly earnings and their senior executives hold conference calls with investors on a regular basis, most mutuals tend to keep a low profile. A few big mutual insurers remain household names but many of the most prominent insurers converted to stock companies in the demutualization craze 20 years ago. In the September issue, Best’s Review turns its attention to the “old sleeping giants”—the under- covered mutual insurance segment and those insurers that posted strong growth in 2021. In “US Mutuals Find Stability Key Amid Turbulence Following a Good 2021,” Best’s Review spoke with the CFO at Penn Mutual Life Insurance Co. about the company’s growth and examined the performance of some of the other life mutual insurers with strong growth. Penn Mutual had its best sales year ever, posting 12.8% growth in total admitted assets to $37.7 billion and moving up one notch in the Top 25 US Mutual Life/Health rankings to No. 12. In “Expansion Spurs Growth for US P/C Mutuals Moving Up the Charts,” Best’s Review spoke with Acuity CEO Ben Salzmann, Sentry CEO Pete McPartland and West Bend CEO Kevin Steiner about the growth at their companies. “We were willing to spend significantly [to upgrade all technology and analytics systems]. We are ahead of the industry by a wide margin in terms of having replaced all of our legacy systems. Having replenished all of our technology has been a real boon to us,” said Sentry’s McPartland. The September issue also includes a ranking of the top U.S. private flood insurers and the top 50 global reinsurers. Some of the biggest movers in the ranking of flood insurers included Sompo Holdings with 2021 direct premiums written up 999.9% to No. 12 from No. 39, Munich-American Holdings up 196.8% to No. 14 from No. 16 and Trisura US Insurance Group, up 110.5% to No. 17 from No. 20. The ranking is included in the article “Republican Senators Offer One-Year NFIP Extension Bill.” The NFIP is currently authorized through Sept. 30. The ranking of the top global reinsurers, meanwhile, showed Munich Re and Swiss Re returning to the No. 1 and No. 2 spots, respectively. With interest rates marching higher, asset management is once again a key concern for insurers. In “Private Placements Likely to Remain in US Insurers’ Portfolios Despite Rising Rates,” AM Best examines the outlook for private placement investments. Best’s Review spoke with experts from Conning, Income Research + Management and AM Best. BR Patricia Vowinkel Executive Editor patricia.vowinkel@ambest.com2BEST’S REVIEW • SEPTEMBER 2022 CONTENTS MUTUALS Pages 40-48 Best’s Review focuses on the mutual insurance sector, including interviews with executives from mutual insurers, such as Penn Mutual Life, Acuity Insurance, Sentry Insurance and West Bend Mutual. Coverage includes rankings of the largest life/ health and the largest property/casualty mutual insurers. L/H MUTUAL INSURERS Page 40 US Mutuals Find Stability Key Amid Turbulence Following a Good 2021 Penn Mutual Life Insurance Co. led its mutual peers in growth of 2021 admitted assets. A mix of stability, investment returns and the mutual structure itself earned the company a place alongside two other mutuals posting double-digit returns. P/C MUTUAL INSURERS Page 44 Expansion Spurs Growth for US P/C Mutuals Moving Up the Charts Three property/casualty mutual insurers say the use of the independent agents distribution channel, tech upgrades and careful geographic risk spread are key to their increase in business. ISSUES & ANSWERS Page 21 Specialty Insurance Perspective and Climate Risk Disclosure Experts discuss the new opportunities in the specialty lines market and how insurers’ approaches to investing are evolving due to climate change exposure. NATIONAL FLOOD INSURANCE PROGRAM Page 30 Republican Senators Offer One-Year NFIP Extension Bill The Biden administration earlier this year gave Congress 17 proposals to reform the NFIP, including measures to end NFIP coverage to properties that repeatedly flood, prohibit new construction in flood-prone areas and require sellers and renters to make full disclosure of a property’s flood history. ASSET MANAGEMENT Page 35 Private Placements Likely to Remain in US Insurers’ Portfolios Despite Rising Rates Direct lending outside the publicly traded realm of corporate bonds found greater favor amid low interest rates. Don’t look for that to change overnight as the Federal Reserve enacts inflation-fighting increases. Lack of trading opportunities, diversification and investment patterns may make it a crawl rather than a rush for the door.Local expertise with global capabilities. Coverages are underwritten by the following insurance company subsidiaries of Intact Insurance Group USA, LLC: Atlantic Specialty Insurance Company, Homeland Insurance Company of New York, Homeland Insurance Company of Delaware, OBI America Insurance Company, OBI National Insurance Company, located in Plymouth, MN, or The Guarantee Company of North America USA, located in Southfield, MI. With our deep product and industry expertise spanning more than 20 specialized segments, we deliver global solutions to address the unique risks you face. Our inland marine experts have a comprehensive understanding of your construction, transportation, fine arts business and more. Let us tailor a solution for your specialized insurance needs. To learn more, talk to your broker or visit intactspecialty.com4BEST’S REVIEW • SEPTEMBER 2022 CONTENTS (continued ) COLUMNS 14 At Large 16 Risk Adviser 18 Regulatory/Law DEPARTMENTS 1 From the Editor’s Desk 4 Advertisers Index 6 Best’s Calendar 8 Executive Changes 11 Web Traffic 12 Masthead: Forestay 13 In the News 57 What AM Best Says 59 Underwriting & Loss Control 61 Book Store 62 App Store 64 Trending: Best’s News 65 Trending: Best’s Research 66 AM Best Webinars 68 AM Best TV & Audio 69 Best’s Credit Rating Actions 75 Corporate Changes 76 Preferred Publisher Program 77 Industry Updates 79 Masthead: Backstay 80 The Last Word ADVERTISERS IFC Philadelphia Insurance Cos. 3 One Beacon 5 Saint Joseph’s University 7 Florida State University 20 Equitable Life Insurance Co. 22 Nationwide 24 WSIA 26 Munich Re 28 Wellington Management Co. 31 Best’s Credit Reports & Best’s Financial Reports 33 Lexington Insurance 39 Conning Inc. 49 AM Best 55 BestEsp 63 Best’s State Rate Filings 67 AM Best’s Ratings Services IBC SCOR Global Life BC Applied Underwriters Notice: While AM Best confirms the accuracy of Best’s Ratings of insurers referenced in advertisements published in this magazine, these ratings are subject to change after publication. The current ratings of insurance companies are available free on the web at www.ambest. com/ratings. Further, we can’t warrant the Best’s Ratings claimed by brokers advertising coverages from unrated insurers. In addition, some of the insurance policies, products and services advertised may not be available, licensed or legal in all jurisdictions. Cover photo by Kim Bjorheim. LIFE INSURANCE Page 50 Total Life Issued Down in 2021; Ordinary Life Climbs in Mixed Year Looking back, 2021 was a year in which COVID-19 mortality was up, then down, then up again. Life insurers brought in some new customers. And it was a year in which market volatility and inflation started to rear their heads for the first time in recent memory. BEST’S RANKINGS Page 34 Top 25 Writers - US Private Flood – 2022 Edition Ranked by 2021 direct premiums written. Page 43 Top 25 US Life/Health Mutual Insurers – 2022 Edition Ranked by 2021 admitted assets. Page 48 Top 25 US Property/Casualty Mutual Insurers – 2022 Edition Ranked by 2021 net premiums written. Page 52 US Life/Health – 2021 Ordinary Life Average Policy Size and Lapse Ratios – 2022 Edition Ranked by 2021 ordinary life business issued. Page 52 US Life/Health – Group Life Issued – 2022 Edition Ranked by 2021 group life business issued. Page 52 US Life/Health – Group Life In Force – 2022 Edition Ranked by 2021 group life business in force. Page 53 US Life/Health – Total Life Issued – 2022 Edition Ranked by 2021 total life business issued. Page 53 US Life/Health – Total Life In Force – 2022 Edition Ranked by 2021 total life business in force. Page 54 US Life/Health – Ordinary Life Issued – 2022 Edition Ranked by 2021 ordinary life business issued. Page 54 US Life/Health – Ordinary Life In Force – 2022 Edition Ranked by 2021 ordinary life business in force. Page 54 US Life/Health – Term Life Issued – 2022 Edition Ranked by 2021 term life business issued. Page 54 US Life/Health – Term Life In Force – 2022 Edition Ranked by 2021 term life business in force. Page 56 Top 50 Global Reinsurers – 2022 Edition Ranked by unaffiliated gross premiums written in 2021. Page 58 US Multi-Peril Crop – Top 20 Carriers – 2022 Edition Ranked by 2021 multi-peril crop direct premiums written. Visit news.ambest.com for a full listing of Best’s Rankings.Saint Joseph’s University’s TUVEFOUT DPOUJOVFUPQFSGPSNXFMMJOJOEVTUSZ DPNQFUJUJPOTBEEJOHGJSTUQMBDFJOUIF ".#FTUTUVEFOUDPNQFUJUJPOUPBO BMSFBEZJNQSFTTJWFMJTU The students and their fellow insurance majors follow a rigorous CPCU-aligned curriculum that’s infused with analytics and supported by the prestigious Maguire Academy of Insurance and Risk Management. 5IF.BHVJSF"DBEFNZJTQMFBTFEUPBOOPVODFUIFMBVODIPGUIF4QFODFS%JHJUBM *OTJHIUT-BCUPGVSUIFSFOIBODFUIFTUVEFOUFYQFSJFODFUISPVHIJOTVSBODF BOBMZUJDT JOOPWBUJPO UIPVHIUMFBEFSTIJQBOEJOEVTUSZQBSUOFSTIJQT 5PMFBSONPSF WJTJUTKVFEVJOTVSBODFPSDPOUBDUUIF"DBEFNZT&YFDVUJWFJO3FTJEFODF .JDIBFM&"OHFMJOBBU 3JTJOHUP UIF5PQ Maguire Academy of Insurance and Risk Management6BEST’S REVIEW • SEPTEMBER 2022 Best’s Calendar AM Best to Hold Canada, Reinsurance Market Briefings Sept. 9: AM Best’s Canada Insurance Market Briefing, AM Best, Toronto, Ontario, Canada. Sept. 10-14: Rendez-Vous de Septembre, RVS, Monte Carlo, Monaco. Sept. 11: AM Best’s Reinsurance Market Briefing – Rendez-Vous de Septembre, AM Best, Monte Carlo, Monaco. Sept. 11-14: 2022 Annual Marketplace, Wholesale & Specialty Insurance Association, San Diego, CA, USA. Sept. 12-14: HYBRID. Bermuda Captive Conference, Bermuda Business Development Agency, Hamilton, Bermuda. Sept. 18-21: AICP Annual Meeting, Association of Insurance Compliance Professionals, Miami, FL, USA. Sept. 18-21: HYBRID. NAMIC’s 127th Annual Convention, National Association of Mutual Insurance Companies, Dallas, TX, USA. Sept. 28-30: ACLI Annual Conference, American Council of Life Insurers, Washington, DC, USA. All events subject to change as organizations monitor developments regarding COVID-19. For a full list of conferences and cancellations, visit www.bestreview.com/calendar. Attending Exhibiting Speaking Hosting Sponsoring Video September Is Mutual Insurance Awareness Month Mutual insurers are owned by and run for the benefit of their policyholders. Some of the largest U.S. mutual insurers include New York Life Group, Massachusetts Mutual Life Group, State Farm Group and Liberty Mutual Insurance Group. Coverage of mutuals begins on page 40. 22.MK071I NAMIC 127th Annual Convention When: September 18 - 21, 2022 Ň Where: Dallas, Texas & Virtual AM Best Rating Services is a sponsor of the event and will host a networking reception on Tuesday, September 20 at 5:30 p.m. ET. AM Best Information Services will exhibit at booth 316. Note that event details are subject to change, scan the QR code for the latest conference information. CONNECT WITH US TO GET THE BEST INDUSTRY PERSPECTIVE Our Insight, Your Advantage ™ Learn More: conferenceinformation@ambest.com www.ambest.com • (908) 439-2200Next >