Healthy competition: Ranking the 25 largest home insurers in the US
This story originally appeared on Insurify and was produced and distributed in partnership with Stacker Studio.
Healthy competition: Ranking the 25 largest home insurers in the US
State Farm, Allstate Insurance, and Liberty Mutual ranked among the top three home insurers in the U.S., respectively. But even with their premiums combined, they only account for 34.68% of the homeowners' insurance market. In fact, among the top 25 home insurers by market share, no single company holds more than 20% of the market.
The lack of monopoly is by design.
"You don't want to insure all (homeowners) because if there's any particular loss in the area or a catastrophe, you only want to insure a certain amount. That's called your appetite," said Janet Ruiz, director of strategic communications at the Insurance Information Institute. "That opens up the market to be a healthy, competitive market."
Another reason for the fragmented market is that insurance companies must have a license in every state they operate. That makes it harder for companies to expand nationally and gives state-focused firms room to thrive. For instance, the Auto Club Group in Michigan, more commonly called Michigan's AAA, ranked 24th.
Top-ranked companies can get the most significant market share by using the best predictive software, actuarial science, artificial intelligence, and other technology to determine which residences to insure.
Peter Kochenburger, visiting professor of law at Southern University Law Center, says insurers have technology so sophisticated that they can generate an individual risk profile on each house on a block. Companies cherry-pick the best homes to insure based on the data.
Major companies then lure the lowest risk — i.e., the most profitable — customers away from smaller companies by charging the lowest prices.
"Insurance is always about trying to take the best risks," Kochenburger said.
To rank the top 25 home insurers with the largest U.S. market share, Insurify looked at homeowners' multiple peril premiums written for 2022 filings, according to the National Association of Insurance Commissioners. The data reflects filings through March 27, 2023, the period when 98.23% of the previous year's casualty and property filings were recorded.
The rankings looked at each company's share of the industry total of $133 billion in direct premiums written, which is the number of premiums for insurance policies written during a specific period. Direct premiums earned, by contrast, are the paid premiums for policies that expired during that period — meaning the companies may no longer owe money to cover claims for those policies. The data also detail the ratio of direct losses to direct premiums earned.
25. American International Group
- Market share: 0.63%
- Direct premiums written: $844.6 million
- Direct premiums earned: $963.5 million
- Ratio of direct losses incurred to direct premiums earned: 50.56
24. The Auto Club Group | Michigan
- Market share: 0.64%
- Direct premiums written: $856.4 million
- Direct premiums earned: $808.3 million
- Ratio of direct losses incurred to direct premiums earned: 84.60
23. Country Financial
- Market share: 0.66%
- Direct premiums written: $877.3 million
- Direct premiums earned: $830.4 million
- Ratio of direct losses incurred to direct premiums earned: 67.92
22. Cincinnati Insurance
- Market share: 0.70%
- Direct premiums written: $931 million
- Direct premiums earned: $841.2 million
- Ratio of direct losses incurred to direct premiums earned: 57.95
21. The Hartford
- Market share: 0.70%
- Direct premiums written: $934.6 million
- Direct premiums earned: $917.8 million
- Ratio of direct losses incurred to direct premiums earned: 49.43
20. Mercury General
- Market share: 0.72%
- Direct premiums written: $956.9 million
- Direct premiums earned: $890.1 million
- Ratio of direct losses incurred to direct premiums earned: 60.18
19. Heritage Insurance Holdings
- Market share: 0.74%
- Direct premiums written: $981.4 million
- Direct premiums earned: $940.3 million
- Ratio of direct losses incurred to direct premiums earned: 87.13
18. Amica Mutual Insurance
- Market share: 0.76%
- Direct premiums written: $1 billion
- Direct premiums earned: $983.9 million
- Ratio of direct losses incurred to direct premiums earned: 65.75
17. Auto Club Enterprises Insurance Group
- Market share: 0.76%
- Direct premiums written: $1 billion
- Direct premiums earned: $947.3 million
- Ratio of direct losses incurred to direct premiums earned: 61.85
16. CSAA Insurance Group
- Market share: 0.89%
- Direct premiums written: $1.2 billion
- Direct premiums earned: $1.1 billion
- Ratio of direct losses incurred to direct premiums earned: 39.99
15. Tokio Marine Holdings
- Market share: 0.90%
- Direct premiums written: $1.2 billion
- Direct premiums earned: $1.1 billion
- Ratio of direct losses incurred to direct premiums earned: 57.71
14. Universal Insurance Holdings
- Market share: 1.32%
- Direct premiums written: $1.8 billion
- Direct premiums earned: $1.7 billion
- Ratio of direct losses incurred to direct premiums earned: 93.89
13. Auto-Owners Insurance
- Market share: 1.61%
- Direct premiums written: $2.1 billion
- Direct premiums earned: $2 billion
- Ratio of direct losses incurred to direct premiums earned: 83.49
12. Erie Insurance
- Market share: 1.65%
- Direct premiums written: $2.2 billion
- Direct premiums earned: $2.1 billion
- Ratio of direct losses incurred to direct premiums earned: 76.67
11. Citizens Property Insurance Corp.
- Market share: 1.70%
- Direct premiums written: $2.3 billion
- Direct premiums earned: $1.7 billion
- Ratio of direct losses incurred to direct premiums earned: 144.37
10. Progressive
- Market share: 1.84%
- Direct premiums written: $2.4 billion
- Direct premiums earned: $2.3 billion
- Ratio of direct losses incurred to direct premiums earned: 83.22
9. Chubb
- Market share: 2.57%
- Direct premiums written: $3.4 billion
- Direct premiums earned: $3.3 billion
- Ratio of direct losses incurred to direct premiums earned: 53.09
8. Nationwide
- Market share: 2.85%
- Direct premiums written: $3.8 billion
- Direct premiums earned: $3.6 billion
- Ratio of direct losses incurred to direct premiums earned: 74.82
7. American Family Insurance
- Market share: 4.35%
- Direct premiums written: $5.8 billion
- Direct premiums earned: $5.4 billion
- Ratio of direct losses incurred to direct premiums earned: 72.12
6. Travelers Insurance
- Market share: 4.88%
- Direct premiums written: $6.5 billion
- Direct premiums earned: $6 billion
- Ratio of direct losses incurred to direct premiums earned: 68.72
5. Farmers Insurance
- Market share: 6.22%
- Direct premiums written: $8.3 billion
- Direct premiums earned: $7.9 billion
- Ratio of direct losses incurred to direct premiums earned: 63.63
4. United Services Automobile Association
- Market share: 6.65%
- Direct premiums written: $8.9 billion
- Direct premiums earned: $8.4 billion
- Ratio of direct losses incurred to direct premiums earned: 73.45
3. Liberty Mutual
- Market share: 7.31%
- Direct premiums written: $9.7 billion
- Direct premiums earned: $9 billion
- Ratio of direct losses incurred to direct premiums earned: 65.69
2. Allstate Insurance
- Market share: 9.02%
- Direct premiums written: $12 billion
- Direct premiums earned: $11.2 billion
- Ratio of direct losses incurred to direct premiums earned: 63.27
1. State Farm
- Market share: 18.35%
- Direct premiums written: $24.4 billion
- Direct premiums earned: $23.2 billion
- Ratio of direct losses incurred to direct premiums earned: 60.21
Story editing by Jeff Inglis. Copy editing by Kristen Wegrzyn. Photo selection by Elizabeth Ciano.
