Even as it posted its highest loss ratio in nearly six years, State Farm Mutual Automobile Insurance Co. remained the marketshare leader in US homeowners insurance in the third quarter.
The Bloomington, Ill.-based carrier recorded a 9.6% year-over-year increase in direct written premiums to $7.52 billion in the period and accounted for an 18% share of the market, according to an S&P Global Market Intelligence analysis of the 10 largest homeowners insurers.
The total doubled that of No. 2 Allstate Corp., which at $3.76 billion holds a 9% markets share. United Services Automobile Association, which recorded $3.02 billion in premiums, and Liberty Mutual Holding Co. Inc., which logged $2.94 billion in direct written premiums, were third and fourth, respectively. Each control about 7% of the market.
State Farm also had the highest loss ratio in the analysis at 99.4%, an increase of 26 percentage points from 73.4% a year earlier. Losses in Hawaii from the Maui wildfires helped push the insurer's loss ratio to its highest level in any three-month period since the fourth quarter of 2017.
The most dramatic change in a loss ratio in this analysis was at Citizens Property Insurance Corp. The Florida insurer of last resort was 10th in terms of market share for the third straight quarter, with direct written premiums of $920.5 million, down from $960.5 million in the second quarter.
Despite the impact of Hurricane Idalia, Citizens' loss ratio plummeted to 46.0% from 478.3% in the third quarter of 2022, when the insurer incurred $2.6 billion in catastrophe losses from Hurricane Ian. Citizens raised its losses projections from Ian to $3.8 billion in November 2022.
Mixed results for ratios
Five insurers in the analysis, including State Farm, saw year-over-year increases in their homeowners loss ratios. The increases were fueled by a total of eight billion-dollar weather events in the quarter that included severe storms in the Midwest and Northeast, as well as Hurricane Idalia and the Maui wildfires.
American Family Insurance Co. had the second-highest ratio in the analysis at 96.8% and had the steepest increase. The insurer's ratio rose 39.7 percentage points from 57.1% a year ago.
Also seeing increases were Nationwide Mutual Insurance Co., 86.4% from 81.8%, The Travelers Cos. Inc., 80.2% from 67.3%, and Liberty Mutual, 76.7% from 61.6%.
Travelers' cat losses in the quarter rose 66% year over year to $850 million from $512 million. CFO Dan Frey said during the company's third-quarter earnings call that a Property Claims Services event occurred in 91 of the 92 days in the quarter and several factors were behind that statistic.
"One is there do seem to be more storms more frequently [and] more people have moved into harm's way in terms of where the demographic spread of risk is," Frey said. "Three, inflation has resulted in the impact of those costs being higher."
The five insurers in the analysis who saw their ratios fall were Citizens, USAA, Allstate, Farmers Insurance Group of Cos. and Chubb Ltd.
The analysis found that the homeowners loss ratio for the industry declined year over year to 80.3% from 103.7%, while direct written premiums rose to $41.83 billion from $36.86 billion a year ago.
