Post on 16-Dec-2015
transcript
LMG Presentation to LMG Presentation to International Insurance SocietyInternational Insurance Society
2
Liberty Mutual’s Current Business MixLiberty Mutual’s Current Business Mix
38%
23%
39%
2005
WC
Other Commercial Lines
Personal Lines
Source: Net Written Premium; 2005 Liberty Mutual MD&A; Personal Lines includes Personal Auto and HomeSource: Net Written Premium; 2005 Liberty Mutual MD&A; Personal Lines includes Personal Auto and Home
3
2005 Property and Casualty Insurance2005 Property and Casualty InsuranceTop 10 U.S. WritersTop 10 U.S. Writers
DWP
($ millions)
1 State Farm $48,762
2 American International Group 35,138
4 Allstate 27,320
5 St. Paul Travelers 21,495
Liberty Mutual Group 16,558
7 Nationwide 15,251
8 Progressive 14,298
9
Hartford Financial Services 12,25910
6
Market
Share
10.2%
7.3%
5.7%
4.5%
3.5%
3.2%
3.0%
2.6%
National Indemnity 13,488 2.8%
3 Zurich Farmers 27,332 5.7%
Personal Lines CompaniesPersonal Lines Companies
Source: OneSourceSource: OneSource
4
Progressive vs. S&P Insurance IndexProgressive vs. S&P Insurance Index5-Year Stock Price Performance5-Year Stock Price Performance
Source: CNBC.comSource: CNBC.com
S&P Insurance Index
Progressive
5
Personal Auto Premium Trend Personal Auto Premium Trend
0%
20%
40%
60%
80%
100%
120%
2000 2005
% D
WP
Gro
wth
Industry (ex Progressive) Progressive
Source: OneSource; 2000 and 2005 Direct Written PremiumSource: OneSource; 2000 and 2005 Direct Written Premium
6
Progressive vs. Industry Progressive vs. Industry Combined Ratio Trend 2000-2005Combined Ratio Trend 2000-2005
80%
85%
90%
95%
100%
105%
110%
2000 2001 2002 2003 2004 2005
P&C Auto
Progressive
Source: OneSourceSource: OneSource
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Monoline Insurance CompanyMonoline Insurance Company5-Year Stock Price Performance5-Year Stock Price Performance
Source: CNBC.comSource: CNBC.com
Commerce Group
S&P Insurance Index
Mercury General
Progressive
Infinity Property & Casualty
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Personal Lines PremiumPersonal Lines Premium(% of P&C Industry Premium)(% of P&C Industry Premium)
Other Lines54%
Personal Lines46%
2005 DWP, $ Billions
Personal Lines $221
Other Lines 258
Industry Total $479
Source: OneSource; 2005 Direct Written Premium. Personal Lines includes the following: Personal Auto and HomeSource: OneSource; 2005 Direct Written Premium. Personal Lines includes the following: Personal Auto and Home
9
2005 Top 10 Property Writers2005 Top 10 Property Writers
Source: OneSource; 2005 Direct Written Premium. Property includes the following: Fire, Allied, Inland Marine and Boiler & MachinerySource: OneSource; 2005 Direct Written Premium. Property includes the following: Fire, Allied, Inland Marine and Boiler & Machinery
DWP
($ millions)
1 $2,941
2
American International Group
2,7262,726
4
Ace American Ins Co
1,467
5
Zurich Ins Co Group
1,252
Hartford Fire Group
1,134
7
Continental Casualty Group
923
8
Assurant Group
804
9
Liberty Mutual Group
696
10 692
6
Market
Share
9.6%
8.9%8.9%
4.8%
4.1%
3.7%
3.0%
2.6%
2.3%
2.2%
3 St Paul Travelers Companies 2,179 7.1%
FM GlobalFM Global
48.1%
Chubb
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Property Lines PremiumProperty Lines Premium(% of P&C Industry Premium)(% of P&C Industry Premium)
All Other Lines94%
Property 6%
Property Lines % of P&C Industry
DWP of Leading Property Lines Companies
2005 DWP, $ Billions
Property Lines $31
Other Lines 448
Industry Total $479
Top 10 Property
Cos48%
All Other Cos52%
Source: OneSource; 2005 Direct Written Premium. Property includes the following: Fire, Allied, Inland Marine and Boiler & MachinerySource: OneSource; 2005 Direct Written Premium. Property includes the following: Fire, Allied, Inland Marine and Boiler & Machinery
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Personal Auto Premium Trend Personal Auto Premium Trend
0%
20%
40%
60%
80%
100%
120%
2000 2005
% D
WP
Gro
wth
Industry (ex Progressive & Geico) Progressive
Geico Liberty Mutual
Source: OneSource; 2000 and 2005 Direct Written PremiumSource: OneSource; 2000 and 2005 Direct Written Premium
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Personal Lines Premium TrendPersonal Lines Premium Trend 1996-2005 1996-2005
$0
$30
$60
$90
$120
$150
$180
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Dir
ec
t W
ritt
en
Pre
miu
m (
$B
illi
on
s) Auto
Home
4.4%
8.7%
CAGR1996-05
Source: OneSourceSource: OneSource
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Personal Lines Rate Increase TrendPersonal Lines Rate Increase Trend
0.6%
4.8%
7.5% 7.8%
2.8%
1.5%
4.1%
5.5%
10.6%
7.3%
3.8%
2.6%
0.0%
4.0%
8.0%
12.0%
2000 2001 2002 2003 2004 2005
Auto Home
Source: Insurance Information InstituteSource: Insurance Information Institute
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Top Ten Personal Auto InsurersTop Ten Personal Auto Insurers1984, 1994, 20041984, 1994, 2004
Source: CSFB 2005 Property-Casualty Insurance Primers; Rankings are based on Personal Auto DWP for each of the years shownSource: CSFB 2005 Property-Casualty Insurance Primers; Rankings are based on Personal Auto DWP for each of the years shown
$ millions
Company DWP Company DWP Company DWP1 State Farm $7,885 1 State Farm $22,093 1 State Farm $29,2822 Allstate 4,574 2 Allstate 11,548 2 Allstate 16,6553 Farmers 2,357 3 Farmers 5,187 3 Progressive 11,6454 Nationwide 1,569 4 Nationwide 3,736 4 GEICO 8,9655 Aetna 1,134 5 USAA 3,334 5 Farmers 7,9916 USAA 1,005 6 GEICO 2,333 6 USAA 5,6187 Travelers 907 7 Progressive 2,131 7 Liberty Mutual 4,6258 Liberty Mutual 827 8 Liberty Mutual 1,626 8 AIG 3,9269 GEICO 814 9 American Family 1,611 9 American Family 3,596
10 Kemper 604 10 Prudential 1,476 10 St Paul Travelers 3,321Total $21,676 Total $55,075 Total $95,624
1984 1994 2004
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Personal Auto Personal Auto Combined Ratio Trend 2000-2005Combined Ratio Trend 2000-2005
85%
95%
105%
115%
125%
Farmers LMG (PM only)
P&C Industry State Farm Allstate GEICO Progressive
2000 2005
Source: OneSource and Personal Market Finance for LMGSource: OneSource and Personal Market Finance for LMG
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P&C Insurance Advertising Expense Trend P&C Insurance Advertising Expense Trend 2002-20052002-2005
$0
$50
$100
$150
$200
$250
$300
$350
$400
GEICO Allstate State Farm Progressive
$ M
illi
on
s
2002 2003 2004 2005
Source: 2002-2004 is based on CSFB Property-Casualty Industry Primer 2005; 2005 numbers are based on 2004-05 growth rate of the following: Source: 2002-2004 is based on CSFB Property-Casualty Industry Primer 2005; 2005 numbers are based on 2004-05 growth rate of the following: GEICO 40%, State Farm 27%, Allstate 13%, Progressive 2%GEICO 40%, State Farm 27%, Allstate 13%, Progressive 2%
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Industry Personal AutoIndustry Personal Auto Combined Ratio Trend 1976-2005 Combined Ratio Trend 1976-2005
90%
95%
100%
105%
110%
115%
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
Co
mb
ine
d R
ati
o
Source: OneSourceSource: OneSource
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Insurance Carriers Who Withdrew from Insurance Carriers Who Withdrew from Personal AutoPersonal Auto
Source: CSFB Property Casualty Insurance PrimersSource: CSFB Property Casualty Insurance Primers
Royal & Sun
Continental Foremost USF&G St. PaulW.R.
Berkley
AlliedGeneral Accident
Commercial Union
Guide One Prudential
Cigna CNA Reliance KemperGeneral Electric
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Liberty Mutual’s Business MixLiberty Mutual’s Business Mix1985, 1995, 20051985, 1995, 2005
25%
35%
40%27%32%
41%
38%
23%
39%
1985 1995
2005
WC
Other Commercial Lines
Personal Lines
Source: Net Written Premium; 1985 Liberty Mutual Annual Report, OneSource, 2005 Liberty Mutual MD&A; Personal Lines includes Personal Source: Net Written Premium; 1985 Liberty Mutual Annual Report, OneSource, 2005 Liberty Mutual MD&A; Personal Lines includes Personal Auto and HomeAuto and Home