State Specialists List for 2011 New York, New Jersey, Connecticut, Pennsylvania and Washington DC

In 2007, Demotech, Inc. created an industry wide, objective classification system for property and casualty insurance companies. The Demotech Company Classification System categorizes all property and casualty insurers into one of eleven categories based on Demotech’s analysis of the data reported by the companies.

The eleven categories in the Demotech Company Classification System are Nationals, Near Nationals, Super Regionals, Regionals, State Specialists, Coverage Specialists, Strategic Subsidiaries, Risk Retention Groups, Surplus Lines Carriers, Reinsurers and Companies with less than $1 million in direct premium written.

To be categorized as a State Specialist, a carrier must be an individual, active company reporting data to the NAIC using the P&C annual statement format at 12/31/2010. It must write at least $1,000,000 of direct premium at 12/31/2010 with 90 percent or more in one state. Further, it cannot be a surplus lines company, risk retention group or reinsurance company.

State Specialists focus on their particular state and develop expertise in that market. This expertise allows State Specialists to effectively compete against more widely licensed insurers by knowing their state better than those competitors.

In total, 814 companies were categorized as State Specialists for 2011, which is approximately thirty percent of the nearly 2,750 companies that Demotech reviewed. State Specialists wrote about 15 percent of the industry’s direct written premium in 2010.

Joseph Petrelli, President of Demotech, specifies, “State Specialists are typically the independent agent’s most reliable and consistent markets. These companies are dedicated to a geographic area, understand it and consistently strive to serve it. Demotech is pleased to provide State Specialists with the attention they deserve.”

The chart below provides details regarding State Specialists in New York, New Jersey, Connecticut, Pennsylvania and Washington, D.C.

2011 State Specialists – New York

There were 71 companies identified as State Specialists in New York. In fact, New York had the third most State Specialists by count, behind only Texas and Florida. For the year ending 2010, New York State Specialists accounted for approximately $3.4 billion in direct premium written, ranking New York seventh in production by State Specialists. As evidence of the financial stability of the State Specialists in New York, New York ranked third in policyholders’ surplus, as it accounted for over $5.6 billion.

In examining the list of State Specialists on a state-by-state basis, one finds a list of financially stable property and casualty insurers dedicated to serving their market. However, it is evident that in New York, companies affiliated with a group do not dominate the list by count, direct premium written or by policyholders’ surplus for State Specialists. Barry Koestler, Chief Ratings Officers of Demotech, observes, “Whether a State Specialist is affiliated with a large group or is independent, these companies serve a valuable role in the marketplace by bringing specific, local knowledge to the consumer. Some of the State Specialists have been serving their focused niche for more than 100 years.”

2011 State Specialists – New Jersey

State Specialists in New Jersey have a slightly different background than their counterparts in New York. Most of the State Specialists in New Jersey are affiliated with a holding company or group, and most focus on auto insurance. Of the 57 companies identified as State Specialists New Jersey, only 11 are unaffiliated with a group. Palisades Group owns the most State Specialists in New Jersey, eight.

For the year ending 2010, New Jersey had the fourth most State Specialists by count and accounted for more than $6.5 billion in direct premium written, ranking it fourth. New Jersey also accounted for nearly $7 billion of policyholders’ surplus, ranking it second.

2011 State Specialists – Connecticut, Pennsylvania and Washington DC

Most of the State Specialists in Connecticut and Washington DC are smaller in stature as they accounted for approximately $65 million in direct premium written and over $1 billion of policyholders’ surplus combined. Most of the State Specialists in these jurisdictions are affiliated with a group.

A majority of the State Specialists in Pennsylvania are unaffiliated companies and accounted for approximately $623 million in direct premium written and over $1.1 billion of policyholders’ surplus. Pennsylvania had the sixth most State Specialists by count with 49.

The list on the following pages provides the companies categorized as State Specialist for New York, New Jersey, Connecticut, Pennsylvania and Washington DC.