Largest US Home Insurance Companies

May 12, 2010
Daniel Workman

AIG Financial Strength Rating is A- - jdiggans (Flickr)

Among the largest US homeowner insurers, Berkshire Hathaway and Travelers are tops in revenues and profits while State Farm leads in financial strength.

America’s top 12 home insurance companies generated $470 billion in revenues during 2009. That represents a 35.8% increase over the $346 billion posted just one year earlier.

Sometimes called property and casualty insurers, these giant home insurance companies were generally profitable in 2009. Overall, the 12 largest US home insurers generated $10 billion in profits during 2009 – up about $98 billion from a jaw-dropping $89-billion loss for 2008.

Home foreclosures in the U.S. are still high. This provides even more incentive for existing homeowners to buy their property insurance from financially sound providers.

The lists below help consumers to gauge the revenues, profitability and financial strength for some of America’s leading home insurance companies.

US Homeowner Insurance Companies with Highest Sales

Headquarters for 4 of the top 12 home insurance companies are in New York City, population 8.4 million.

In contrast, Progressive’s home office is in tiny Cleveland suburb of Mayfield, Ohio with its 3,435 citizens. Allstate’s headquarters is in Northbrook, Illinois. Northbrook is home to 33,435 residents.

Berkshire Hathaway (headquarters in Omaha) … US$112.5 billion (up 4.4% from 2008)
American International Group (New York) … $103.2 billion (up 829.3%)
State Farm Insurance (Bloomington) … $61.5 billion (up 0.2%)
Allstate (Northbrook) … $32 billion (up 8.9%)
Liberty Mutual Insurance Group (Boston) … $31.1 billion (up 7.8%)
Hartford Financial Services (Hartford) … $24.7 billion (up 167.9%)
Travelers (New York) … $24.7 billion (up 0.8%)
Nationwide (Columbus) … $20.8 billion (up 4.5%)
United Services Automobile Association (San Antonio) … $17.6 billion (up 36%)
Progressive (Mayfield Village) … $14.6 billion (up 13.4%)
Loews (New York) … $14.1 billion (down 4.1%)
Chubb (Warren) … $13 billion (down 1.6%).

Among the U.S. home insurance companies, AIG and Hartford Financial had the fastest percentage gains in revenues. Two homeowner insurers, Loews and Chubb saw their top-line amounts decline while Travelers’ revenues were flat.

Profit Leaders in US Home Insurance

Ten of the top 12 U.S. homeowner insurance companies posted profits during 2009. United Services Automobile Association showed the largest percentage gain, while 3 other insurers had double-digit percentage improvements in profit.

Berkshire Hathaway … US$8.1 billion (up 61.3% from 2008)
Travelers … $3.6 billion (up 23.9%)
United Services Automobile Association … $3 billion (up 614.5%)
Chubb … $2.2 billion (up 21%)
Progressive … $1.1 billion (up from a $70-million loss)
Liberty Mutual Insurance Group … $1 billion (down 10.3%)
Allstate … $854 million (up from a $20.1-million loss)
State Farm Insurance … $767 million (up from a $541.8-million loss)
Nationwide … $716 million (up from a $342-million loss)
Loews … $564 million (down 87.5%)
Hartford Financial Services … -$887 million (down from a $2.2-billion loss)
American International Group … -$10.9 billion (down from a $99.3-billion loss).

Even though AIG and Hartford Financial endured significant losses for 2009, those amounts were still marked improvements over losses in 2008.

Progressive, Allstate, State Farm and Nationwide all returned to black ink last year thus reversing 2008 losses.

Financial Strength Ratings for Home Insurance Companies

Standard & Poor’s provides an objective assessment of an insurance company’s credit rating and financial strength. Possible S&P scores range from AAA+ (highest) to C- (lowest) or D (company in reorganization).

Sorted alphabetically, the following list shows financial strength ratings for home insurance companies discussed above.

Allstate … A-
American International Group … A-
Berkshire Hathaway … AA+
Chubb … AA
Hartford Financial Services … BBB
Liberty Mutual Insurance Group … A-
Loews … A
Nationwide … A+
Progressive … A+
State Farm Insurance ... AAA
Travelers … A-
United Services Automobile Association … AAA

For this peer review of financial strength, the highest S&P financial rating score is AAA. State Farm Insurance and United Services Automobile Association share top honors among the Standard & Poors’ ratings.

America’s largest home insurer, Berkshire Hathaway, is close behind with an S&P credit rating of AA+.

With the worst of its financial problems behind it, AIG financial strength rating is a respectable A-.

Sources

This article provides independent calculations and insights based on data from the Fortune 500 ranking of America’s largest corporations for 2009 and Standard & Poor’s credit ratings.