INTERNATIONAL COOPERATIVE AND MUTUAL INSURANCE FEDERATION Market InSights: USA 2013 edition Including: The US market share of mutual insurance companies Mutual life and P&C premium growth by line of business The 30 largest mutual life and P&C insurers by 2013 premium income
Figure 1 US mutual premiums and market share Premiums USD millions 500,000 400,000 32.1% 300,000 29.7% 200,000 100,000 0 2007 2008 40% 36.5% 34.3% 34.1% 34.3% 34.5% 35% 2009 2010 2011 2012 30% 25% 20% 2013 Market share US MARKET SUMMARY The financial performance of US insurers continued to show signs of improvement in 2013, as the total industry achieved record net income levels in both the life and health (hereafter referred to as life ) and property and casualty (P&C) sectors. Despite this increased overall profitability, insurers continued to be impacted by economic and financial market uncertainty, low interest rates (and low investment yields), high unemployment rates and a number of stricter and more prudent regulatory developments. Aggregate premiums of the US insurance sector fell by 1.1% in 2013 (USD 1.26 trillion), from record premium levels written in the previous year 1 (2012: USD 1.27 trillion). The drop in business volumes experienced in 2013 was the first decline seen since the early years of the financial crisis (2009), although premium levels remained slightly greater (+1.7%) than pre-crisis volumes in 2007 (USD 1.24 trillion). In contrast, the US mutual insurance market 2 grew its premium volumes by a quarter since 2007, as the mutual sector s share of the total US insurance market increased from 29.7% to 36.5% in 2013, a proportional increase of 23% (see Figure 1). The US mutual insurance sector in 2013 USD 459 billion in direct premium income 36.5% share of the total US market USD 2.5 trillion in admitted assets Approximately 450,000 people employed More than 330 million member/policyholders served Over 1,800 mutual insurance companies 2 active in the USA US MUTUAL MARKET SUMMARY US mutual insurers collectively wrote USD 459 billion in premium income in 2013, an impressive 4.6% growth from the previous year (2012: USD 439 billion). Growth of the mutual sector exceeded the total US market average in five of the previous six years (see Figure 2). Between 2007 and 2013, mutual insurers registered a compound annual growth rate (CAGR) of 3.8%, more than three percentage points greater than the CAGR of the total US market during this period (+0.3%). In 2013, there were over 1,800 mutual insurance companies active in the US market. In terms of premium income, nearly 69% of the mutual sector s total premiums were derived from mutual insurers, with a further 12% each from non-profit insurers and reciprocal insurers (see Figure 3). Figure 2 US market and mutual premium growth % Premium growth 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% 0.2% 2008 8.0% -7.3% 2009-0.8% 1.1% 0.4% 2010 5.1% 5.8% 4.9% 4.2% 4.6% 2011 1 Swiss Re sigma No 3/2014, World insurance in 2013 2 Includes mutual insurance companies, fraternal benefit societies (fraternals), reciprocals, non-profits, exchanges, cooperatives and stock insurance companies owned by mutual parent holding companies. See Figure 3. 2012-1.1% 2013 Total market* Mutual market *Total market as per Swiss Re
Stock insurance companies with mutual holding or parent companies contributed 5% of total mutual premiums and less than 1% of mutual income was generated by insurance pools, exchanges and cooperative insurers. Fraternal insurers held a 2.3% of total mutual premiums in 2013, although their contribution to mutual life business was greater at 6%. MUTUAL LIFE AND PROPERTY & CASUALTY (P&C) BUSINESS In terms of life business, the mutual sector experienced a third successive year of strong premium growth in 2013, with a 4.4% increase from 2012 premium volumes. This was in contrast to the total US life industry, which suffered a 6% decline in premium levels in 2013 and an overall drop of 8% in business volumes between 2007 and 2013. During the same period, mutual life premiums increased by 21%, with a CAGR of 3.3% (compared to the total market CAGR of -1.4%). As a result, mutual life insurers gained a further 7.7 percentage points of the total US life market since 2007 (see Figure 4), as mutual market share grew from 24.2% to over 30% for the first time in 2013 (31.9%). There was a sharp upturn in mutuals share of the life sector in 2013, as market share grew by over 11% from 2012 (28.6%), the strongest annual gain in life market share since 2009 (growing to 29.5% from 26.1% in 2008). Figure 3 Mutual premium income split by insurer type (2013) Reciprocal 11.7% Non-profit 11.8% Stock 4.9% Fraternal 2.3% Other 0.8% Mutual 68.6% Mutual premium growth in the P&C sector in 2013 (+4.7%) outperformed the total P&C industry growth (+3.2%) for the sixth consecutive year. Mutual insurers wrote USD 289 billion in P&C premiums in 2013, a 27% increase from 2007 levels (USD 228 billion). The total P&C market posted positive annual premium growth in five of the previous six years (2009 was the only year of premium contraction), with a 10.3% overall growth and CAGR of 1.6%. In comparison, the mutual P&C sector recorded a CAGR 4.1% between 2007 and 2013, more than three percentage points ahead of the industry average. Mutual market share of P&C insurers grew year-on-year during this period, rising from 34.6% in 2007 to a record high 39.8% in 2013. Figure 4 Mutual life and P&C premiums and market share Premiums USD millions 300,000 250,000 200,000 150,000 26.1% 100,000 24.2% 50,000 29.5% 28.7% 28.6%28.6% 31.9% 34.6% 39.3% 39.8% 37.3% 38.0%38.2%38.8% 40% 35% 30% 25% Market share The mutual sector has been the fastest-growing part of the US insurance industry since the financial crisis, as mutual market share increased from 29.7% in 2007 to 36.5% in 2013. Mutuals share of the US life market grew to a record high in 2013 (31.9%), up from 24.2% in 2007, while mutual P&C market share increased consistently from 34.6% in 2007 to 39.8% in 2013. 0 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 Life P&C 20%
LIFE Despite an increase in profitability in 2013, the US life industry reported a 6.3% decline in premiums from the post-crisis high recorded in the previous year. Aggregate premium income in 2013, especially in group annuity business, normalized following the buyout of two large corporate pension plans 3 in 2012. However, premium volumes in 2013 remained lower than 2011 levels, with drops across most major lines of business. Sales of life products and annuities were weaker, with a suppressed demand for new business in 2013, especially in individual life. Competitive pricing, pressures resulting from the low interest rate environment, and limited economic growth also hampered premium growth for US life insurers. Conversely, the US mutual life sector has posted year-on-year growth since 2010 and grew by 4.4% in 2013 (2012: +4.8%). Mutual life insurers collectively wrote over USD 170 billion in insurance premiums for the first time in 2013. The majority of this premium revenue was made up of annuity business (see Figure 5), with over half in individual (32%) and group annuities (18%). The total US life market earned a similar proportion, just under 48%, of its premium income from annuities. Around 30% of total 2013 business came from individual annuities and 18% from group annuities, the latter following a fall from 23% in 2012. Ordinary life business accounted for a third of the mutual sector s life premiums in 2013, a significantly higher proportion than the US market average (19.8%). Group life policies made up 5% of the premiums in both the mutual and total US life market. Accident and health (A&H) insurance was a smaller line of business in mutual insurers life portfolio than the rest of the US industry, with 11% of total mutual business written in this product line compared to 27% for the total market. Mutual growth significantly outperformed the rest of the market as mutual insurers reported a 13% growth in individual annuities, rebounding from a 3% decline in premium volumes seen in the previous year. In terms of group life insurance, total market premiums declined in both life and annuity business in 2013. Group annuities fell by 27%, reversing the 34% growth experienced in 2012. In the mutual sector, premium volumes also fell sizeably after strong growth in 2012 (+21.5%), although the decline in premiums in 2013 (-7.6%) was not as severe as for the total market. In group life, a smaller line of life business, mutual growth was an impressive 9.3%, as the total market contracted by 2.6%. In other lines of life business, mutual premiums matched the total market with a 2% growth in A&H business. With more than a quarter (27%) of total US life business written in this business line, this moderate growth helped to offset the declines in other product lines but had a limited impact in the mutual sector due to its smaller contribution. In other lines of life business (including credit life, which made up just 0.2% of the mutual life market), growth was negative for the second successive year in 2013. Figure 5 Mutual life premiums by line of business (2013) A&H 11.0% Other life 0.2% Ordinary life 33.8% In terms of premium growth, the mutual sector outperformed the total US life market in all lines of business in 2013 (see Figure 6). In the two largest lines of mutual life business, ordinary life and individual annuities (representing almost two-thirds of the sector by premium income), mutual growth exceed the total market by five and ten percentage points respectively. Ordinary life premiums in the total market contracted by 2.2% in 2013, as mutual premiums grew by more than 3% for the third consecutive year (2012: +3.6%; 2011: +3.4%). Individual annuity business recovered in 2013, and was one of the only major lines of US life business that increased in 2013 (+3.1%). Group annuities 18.4% Individual annuities 31.8% Group life 4.9% 3 Prudential of America Group assumed the pension benefit obligations of US retirees of General Motors Co. and Verizon Communications Inc. during 2012.
Figure 6 Total market and mutual life premium growth by line of business (2012-2013) 20% Total market 15% 13.2% Mutual market 10% 9.3% % Premium growth 2012-2013 5% 0% -5% -10% -15% Ordinary life 3.2% -2.2% -2.6% Group life 3.1% Individual annuities Group annuities 9.3% 2.1% A&H 2.4% Other life -12.2% -2.1% -20% -25% -30% -26.7% The 30 largest mutual life insurers (ranked by direct written premiums) collectively wrote over USD 160 billion in premium income in 2013, representing 94% of total mutual life business (see Figure 7). Six mutuals were amongst the 20 largest insurers in the whole of the US life market in 2013 (one more than in the previous year), with three mutuals ranked among the largest 15 (New York Life, MassMutual Financial and Northwestern Mutual). Just under two thirds (19) of the largest life mutuals posted positive premium growth in 2013 (one less than in 2012). Only five mutuals recorded double-digit premium growth in 2013 (2012: 8), including three mutuals with more than USD 10 billion in 2013 premium income: TIAA Group, Nationwide and Pacific Life. Teachers mutual TIAA was the fastest-growing mutual life insurer with a 22% increase in premium income in 2013. This mutual bucked the trend experienced in the rest of the US annuity market and posted more than a 20% growth in both individual and group annuities. Pacific Life moved into the top 20 ranking of US insurers in 2013 (up two places from 2012) with a 14% premium growth, again driven by strong growth (+18%) in individual annuities (which accounted for 70% of its 2013 life portfolio). Elsewhere, Minnesota-based Securian Financial grew by more than 10% for the second successive year in 2013 (2012:+12.1%) following a year of record sales growth in individual and group insurance. The life insurance arms of two of the largest mutuals for P&C, Liberty Mutual and Nationwide, also posted double-digit growth in life business in 2013 (+15.5% and +13.2% respectively). The US mutual life sector wrote over USD 170 billion in premiums in 2013, a 4% growth from the previous year. Six mutual insurers were ranked in the 20 largest US life insurers by premium income in 2013.
Figure 7 The 30 largest mutual life insurers in 2013 Mutual US Company Structure Direct written premiums (USD 000) % growth Rank Rank* 2013 2012 2011 2012-2013 1 7 New York Life Mutual 23,789,421 22,346,677 23,638,542 +6.5% 2 14 MassMutual Financial Mutual 19,790,856 21,510,063 14,681,424-8.0% 3 15 Northwestern Mutual Mutual 17,334,118 16,176,108 15,394,268 +7.2% 4 18 TIAA Group Stock 13,193,714 10,785,006 11,567,751 +22.3% 5 19 Nationwide Mutual 12,778,420 11,286,911 13,512,444 +13.2% 6 20 Pacific Life Mutual 10,087,881 8,848,239 7,554,776 +14.0% 7 22 Guardian Life Mutual 8,641,550 8,828,592 8,286,249-2.1% 8 30 Securian Financial Mutual 5,970,285 5,173,479 4,649,838 +15.4% 9 32 Thrivent Financial Fraternal 5,430,170 5,180,839 4,986,136 +4.8% 10 34 Mutual of Omaha Mutual 5,318,796 5,241,054 4,901,981 +1.5% 11 35 State Farm Mutual 4,961,465 4,629,856 4,539,845 +7.2% 12 41 OneAmerica Group Stock 3,664,231 3,395,861 3,465,323 +7.9% 13 42 Ohio National Life Mutual 3,489,811 3,833,137 2,519,539-9.0% 14 49 Western & Southern Financial Mutual 2,449,736 2,366,579 2,757,936 +3.5% 15 50 CUNA Mutual Mutual 2,410,254 2,213,633 2,305,663 +8.9% 16 52 USAA Group Reciprocal 2,317,246 2,186,595 2,411,331 +6.0% 17 53 Ameritas Life Mutual 2,281,571 2,253,662 2,209,629 +1.2% 18 55 Liberty Mutual Insurance Mutual 2,186,291 1,892,127 1,714,203 +15.5% 19 59 Penn Mutual Mutual 1,923,501 2,121,353 1,921,629-9.3% 20 60 National Life Mutual 1,841,281 1,875,672 1,735,912-1.8% 21 61 Mutual of America Life Insurance Mutual 1,772,642 1,685,643 1,553,564 +5.2% 22 63 Blue Cross and Blue Shield of Kansas Mutual 1,735,722 1,729,835 1,734,241 +0.3% 23 68 Knights of Columbus Fraternal 1,145,802 1,188,620 1,130,945-3.6% 24 71 Modern Woodmen of America Fraternal 1,074,543 1,133,672 1,207,447-5.2% 25 76 Farmers Insurance Group Reciprocal 922,759 934,675 948,862-1.3% 26 79 HM Insurance Group Non-Profit 790,790 750,541 684,535 +5.4% 27 80 National Guardian Life Insurance Mutual 770,102 715,566 607,972 +7.6% 28 83 Woodmen of the World Life Society Fraternal 737,373 817,752 756,926-9.8% 29 84 Fidelity Security Life Insurance Other 705,990 727,653 609,245-3.0% 30 86 COUNTRY Financial Mutual 657,708 679,561 627,751-3.2% * US rank as per A.M.Best data
PROPERTY AND CASUALTY (P&C) The US P&C industry collectively achieved record net profit levels in 2013 and reported both a positive net underwriting gain (the first since 2009) and a combined ratio of below 100% (95.7%) for the first time since 2007 4. The improved profitability stemmed from moderate premium rate increases and a fall in the frequency and severity of natural catastrophe losses in the US. In 2013, the number of major loss events recorded in the year (128) was the lowest since 2005, as insured losses for 2013 totalled USD 12.8 billion, compared to almost USD 60 billion in the previous year 5. P&C premium growth was in line with recent years at 3.2% in 2013 compared to CAGR of 3.5% since 2011, a significant improvement from the early years of the crisis (between 2007 and 2010 the CAGR was -0.2%). Mutual P&C business grew by 4.7% in 2013 (up to USD 289 billion), which was consistent with growth rates in 2012 (+4.8%) and 2011 (+5.2%). Over 80% of mutual P&C premiums in 2013 were derived from automobile and property and fire (see Figure 8), the two largest segments of the total P&C market, although with a lower concentration (69% of total premiums) in these products. Mutual insurers premiums represented over half of all auto and property & fire business in 2013, with a market share of 52% and 51% respectively. Workers compensation business was the third-largest product line for mutual P&C business in 2013, although with a share of business of 7.7%, it was far smaller than the two largest. Liability premiums made up 6% of the mutual P&C market, with just under 2% in professional liability business. Marine, aviation and transport (MAT) premiums contributed 3% of mutual business and there was less than a 1% contribution from accident and health and other miscellaneous business lines, including surety and fidelity insurance. In other business lines, workers compensation premiums continued to increase in 2013, although at a slower pace than the previous year in which mutual and total market premiums grew by more than 10% from 2011 levels. However, growth remained strong and it continued to be one of the fastest-growing lines of business for mutual insurers, increasing by 6.5% in 2013. In liability lines, mutual premiums fell in professional liability business (-2.8%), although this drop was not as severe as the US market average (-4%). Growth in other liability lines strengthened, with a 7.3% upturn in mutual business in 2013, compared to a 4% growth in the previous year. In accident and health business, mutual premiums saw little change (-0.7%) from the previous year as the US market suffered a 21% drop in premiums. MAT business again supported overall premium growth of the mutual sector, with a 6% increase in 2013. Figure 8 Mutual P&C premiums by lines of business (2013) Other liability 4.4% Professional liability 1.8% MAT 2.8% Workers comp 7.7% Accident and health 0.6% Other 1.0% Premium growth in mutual auto business mirrored the total US market in 2013, with accelerated growth (+4%) in comparison with the previous two years (see Figure 9). In the property and fire sector, mutual premiums increased by over 5% for the second year running as growth was supported by a 7% rise in commercial property business. The total US market increased property and fire premiums by 4% in 2013, as growth in personal property lines weakened from the previous year. Property and Fire 35.5% Auto 46.1% 4 National Association of Insurance Commissioners (NAIC), 2013 Property/Casualty & Title Insurance Industry Report 5 Munich Re, 2013 Natural Catastrophe Year in Review
Figure 9 Total market and mutual premium growth by line of business (2012-2013) 10% 5% 4.4% 4.0% 5.2% 4.0% 8.2% 6.5% 7.2% 7.3% 5.9% 6.0% Total market Mutual market % Premium growth 2012-2013 0% -5% -10% -15% Auto Property and Fire Workers comp Professional liability -2.4% -2.8% Other liability MAT Accident and health -0.7% -0.4% 0.7% Other -20% -20.7% -25% The 30 largest P&C mutuals in the US (see Figure 10) wrote USD 193 billion in insurance premium in 2013, a 5% increase from the previous year (USD 184 billion). State Farm and Liberty Mutual were again ranked as the largest P&C mutual insurers in 2013, as well as the largest P&C insurers in the total US market. Three other mutuals (Farmers Insurance, Nationwide and USAA Group) were ranked among the ten largest insurers in the US market, with a total of eight mutual insurers in the top 20 of US P&C insurers. Among the 30 largest mutuals in 2013, over 93% (28 mutuals) posted positive premium growth figures from the previous year. Six mutuals recorded a premium increase of more than 10% in 2013, one more than in the 2012 ranking of the largest P&C mutuals. Three of these fastest-growing mutuals were single state-operated workers compensation funds/ insurer: The State Insurance Fund (New York), State Compensation Insurance Fund (California), and Austin-based Texas Mutual. Church insurer GuideOne Insurance doubled its premium income in 2013 writing more than USD 1.1 billion in insurance (up from USD 544 million in 2012). The mutual saw a significant growth in commercial lines, especially multi-peril and allied lines, resulting from the opening of a new excess and surplus lines (E&S) platform and offering of a new crop insurance program in 2012. ACUITY and Federated Mutual experienced growth of 14% and 12% respectively in 2013. Both mutuals had a diversified book of personal and commercial lines business in 2013, and posted double-digit growth in the majority of commercial lines, including property, auto and workers compensation. Mutual P&C insurers reported record premium volumes in 2013 (USD 289 billion), and represented just under 40% of the total US P&C market. The two largest P&C insurers in the US in 2013 were mutual insurers, with eight mutuals among the 20 largest insurers ranked by 2013 premiums.
Figure 10 The 30 largest mutual P&C insurers in 2013 Mutual US Company Structure Direct written premiums (USD 000) % growth Rank Rank* 2013 2012 2011 2012-2013 1 1 State Farm Mutual 55,994,246 53,654,237 52,594,199 +4.4% 2 2 Liberty Mutual Insurance Mutual 28,906,283 27,759,638 26,182,606 +4.1% 3 6 Farmers Insurance Group Reciprocal 18,284,148 18,311,402 17,621,146-0.1% 4 7 Nationwide Mutual 18,079,537 17,042,933 16,241,017 +6.1% 5 10 USAA Group Reciprocal 14,562,012 13,286,274 12,125,537 +9.6% 6 16 American Family Insurance Mutual 6,608,588 6,252,368 6,159,772 +5.7% 7 17 Auto-Owners Insurance Mutual 5,527,796 5,226,750 4,974,353 +5.8% 8 19 Erie Insurance Reciprocal 5,076,003 4,630,684 4,270,902 +9.6% 9 27 FM Global Mutual 3,577,815 3,535,702 3,177,979 +1.2% 10 31 Auto Club Enterprises Reciprocal 2,907,214 2,771,976 2,668,943 +4.9% 11 33 CSAA Insurance Group 1 Reciprocal 2,836,762 2,759,413 2,695,604 +2.8% 12 35 Citizens Property Insurance Corp Other 2,761,638 3,180,755 3,084,342-13.2% 13 38 COUNTRY Financial Mutual 2,348,503 2,243,261 2,205,211 +4.7% 14 40 MAPFRE North America 2 Stock 2,315,098 2,208,432 2,200,714 +4.8% 15 41 State Insurance Fund NY (WC) Mutual 2,283,287 1,943,838 1,495,865 +17.5% 16 44 Auto Club Group Reciprocal 2,098,396 2,024,246 1,953,631 +3.7% 17 46 State Auto Insurance Mutual 1,995,286 1,904,513 1,758,694 +4.8% 18 47 Sentry Insurance Mutual 1,921,014 1,825,972 1,729,062 +5.2% 19 48 Amica Mutual Mutual 1,792,800 1,688,392 1,588,976 +6.2% 20 56 EMC Insurance Mutual 1,417,394 1,303,275 1,188,742 +8.8% 21 58 Shelter Insurance Mutual 1,349,322 1,293,182 1,234,543 +4.3% 22 n/a AEGIS 3 Mutual 1,280,125 1,244,704 1,140,260 +2.8% 23 64 Grange Mutual Casualty Pool Mutual 1,191,388 1,111,143 1,089,090 +7.2% 24 65 Federated Mutual Mutual 1,186,684 1,056,373 994,324 +12.3% 25 70 GuideOne Insurance Mutual 1,138,555 544,137 494,652 +109.2% 26 71 Tennessee Farmers Insurance Mutual 1,135,613 1,095,119 1,041,228 +3.7% 27 73 ACUITY Mutual 1,124,310 982,923 839,592 +14.4% 28 74 State Compensation Insurance Fund Mutual 1,112,518 903,787 1,011,147 +23.1% 29 75 Alfa Insurance Mutual 1,096,790 1,049,899 1,065,143 +4.5% 30 77 Texas Mutual Mutual 1,031,357 906,405 729,912 +13.8% * US rank as per A.M. Best data 1 Formerly California State Auto Group 2 US subsidiary of a foreign mutual 3 Registered in Bermuda
ASSETS OF THE MUTUAL SECTOR The US mutual insurance sector held assets worth USD 2.51 trillion in 2013 (see Figure 11), an 8.1% increase from the previous year (2012: USD 2.32 trillion). Mutual insurers assets had grown year-on-year since 2007, with a CAGR of 6.0% during this six-year period. In total, asset values in 2013 were 42% greater than precrisis levels (2007: USD 1.77 trillion). Over 70% of mutual insurers assets were from the life sector, with USD 1.78 trillion in admitted assets in 2013. Life assets grew by almost 9% from 2012 levels (USD 1.64 trillion), compared to a 6.8% growth in the previous year and CAGR of 6.3% since 2007. The admitted assets of mutual P&C insurers also recorded stronger growth in 2013, with a 6.7% rise (up from USD 686 billion in 2012 to USD 732 billion). Average growth since 2007 was not as strong as the life sector, however P&C assets in 2013 had increased by 38% during this period, with a CAGR of 5.5%. Figure 11 Total assets of US mutual insurers Assets USD billions 3,000 2,500 2,511 2,322 2,185 2,084 2,000 1,852 1,952 1,766 1,500 1,000 500 0 2007 2008 2009 2010 2011 2012 2013 Life assets P&C assets Figure 12 The 15 largest mutual insurers by total mutual assets (2013) Assets USD billions TIAA Group New York Life State Farm Northwestern Mutual MassMutual Financial Nationwide 258,109 (+6.5%) 252,523 (+6.1%) 219,903 (+9.1%) 217,171 (+7.2%) 195,081 (+16.4%) 173,804 (+10.3%) Pacific Life Liberty Mutual Insurance Thrivent Financial Guardian Life USAA Group Western & Southern Financial Farmers Insurance Group Securian Financial Ohio National Life 114,389 (+8.1%) 88,317 (+5.0%) 75,467 (+5.5%) 59,924 (+13.7%) 57,414 (+9.4%) 37,995 (+5.7%) 35,461 (+0.4%) 33,471 (+16.6%) 28,802 (+15.8%) Life assets P&C assets
The 15 largest mutual insurers in terms of total assets (see Figure 12) collectively held over USD 1.8 trillion in assets, representing three-quarters of the sector s total in 2013. TIAA Group, the fourth largest mutual life insurer in terms of premium income, was the largest mutual in terms of admitted assets in 2013. It was also the fifth largest insurer in the whole of the US market in terms of total assets held (with USD 258 billion). New York Life held more than USD 250 billion in assets for the first time in 2013, and was the sixth largest insurer in the US. Northwestern Mutual and MassMutual Financial were amongst the largest life insurers in terms of asset rankings in 2013, and three mutuals were ranked among the top 10 insurers in terms of P&C assets: State Farm, Liberty Mutual and Nationwide. All 15 of the largest mutual insurers posted a growth in asset values from 2012, one more than the previous year. Five of these mutuals saw a double-digit increase in assets values, with Securian Financial (+17%), MassMutual (+16%) and Ohio National (+16%) recording the strongest asset growth figures in 2013. US mutuals collectively held over USD 2.5 trillion in admitted assets in 2013, a 42% increase from 2007 asset values. Mutuals aggregate investments were valued at USD 1.85 trillion in 2013 and had grown by over USD 100 billion from the previous year (2012: USD 1.74 trillion). INVESTMENT ASSETS US mutuals invested assets were valued at USD 1.85 trillion in 2013, an increase of over USD 100 billion (or 6.2%) from the previous year (2012: USD 1.74 trillion). Just under 70% of mutual insurers investments were invested in bonds in 2013 (see Figure 13). A further 9% was invested in equities, forming both common and preferred stocks, and just over 12% of invested assets were from mortgage loans and other policy loans. The remaining 9% of mutuals invested assets were derived from cash (and other short-term) investments (1.4%), real estate (0.8%) and other investments (7.0%), which included investments in derivatives. Figure 13 Investment breakdown of US mutual insurers (2012) Real estate 0.8% Mortgage loans and policy loans 12.4% Derivatives and other invested 7.0% Cash 1.4% The overall growth in invested assets in 2013 was driven by a 13% growth in equity investments, as the proportion of mutual investments in stocks grew from 8.1% in 2012. The amount of money invested as mortgage and loan investments increased by 7.5% from the previous year, and derivatives and other invested assets also grew by 7%. A lower proportion of mutual insurers investments were held as bonds and debt instruments compared to the previous year (2012: 70.8%), however, there was a 2.5% growth in monetary terms from 2012 levels. Investments in real estate by mutual insurers declined by 4% in 2013. Common and preferred stocks 8.9% Bonds 69.6%
To view other ICMIF reports in the Market InSights series, please visit www.icmif.org/knowledge/financial-research Market InSights: USA 2013 The research team at ICMIF: Project Manager: Ben Telfer Editing: Faye Lageu, Alison Grant Published January 2015 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright International Cooperative and Mutual Insurance Federation (ICMIF) 2015 ICMIF Denzell House Dunham Road Bowdon Cheshire WA14 4QE United Kingdom www.icmif.org Telephone: +44 161 929 5090 Fax: +44 161 929 5163 Shaun Tarbuck, Chief Executive shaun@icmif.org ICMIF/Americas 8400 Westpark Drive, Second Floor McLean, Virginia 22102-5116 USA www.icmifamericas.org Telephone: +1 703 245-8077 Fax: +1 703 610-0211 Ed Potter: Executive Director epotter@icmifamericas.org The International Cooperative and Mutual Insurance Federation (ICMIF) is a best practice organization committed to giving its members from around the world a competitive advantage. ICMIF helps to grow its mutual and cooperative insurance member organizations by influencing global issues, creating unique networking opportunities and sharing the latest market and member intelligence. ICMIF Market InSights reports are a series of market-specific reports compiled using the latest data from ICMIF s Global Mutual Market Share research, a market intelligence report on the size of the global mutual and cooperative insurance sector. Published annually alongside the ICMIF Global 500, a definitive list of the 500 largest mutual and cooperative insurers in terms of premium income, the report highlights how since 2007 the mutual and cooperative model has been the fastest growing part of the global insurance market; maturing from a global share of 23.4% to 26.7% in 2013. For more information please visit: www.icmif.org facebook.com/icmif @ICMIF_Web