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Mark A. Hofmann

Berkshire grew E&S premiums by 27.6% in third quarter: SNL

December 17, 2013 - 10:37am

Berkshire Hathaway Inc. grew its U.S. excess and surplus premiums by about 27.6% year over year in the third quarter, which was higher than the property/casualty insurance industry's overall 5.29% increase, according to an analysis released Tuesday by Charlottesville, Va.-based SNL Financial L.C.

“Industry watchers have been keeping a close eye on Berkshire following the company's announcement in June that it was forming a new division devoted specifically to U.S. E&S business,” said SNL in its analysis. SNL noted that Berkshire ranked within the top 15 in the third quarter, “although its direct premiums written are still a long way from companies like American International Group Inc., Nationwide Mutual Insurance Co. and W. R. Berkley Corp.” Berkshire ranked 13th on SNL's list of third-quarter 2013 market share of U.S. E&S insurers, up from 15th spot in third-quarter 2012.

“But Berkshire's quarterly direct premiums written have remained around the same level for the past three periods, despite anticipation from market players that the insurance giant might grow aggressively within the space,” said SNL.

In fact, XL Group P.L.C, registered a 27.91% increase in direct written premiums, which moved it to ninth place on the market share list in the third quarter of this year, up from 12th place during the same period in 2012.

But the biggest jump was recorded by Bedford, Texas-based State National Cos., which climbed to 29th in market share during the third quarter of this year from 63rd during the third quarter of 2012.

“This might have been due to the fronting arrangement between State National and Meadowbrook Insurance Group Inc., said SNL. SNL noted that A.M. Best Co. downgraded Meadowbrook's ratings in August and soon after, Meadowbrook announced the agreement with State National.

“This might also help to explain why the Meadowbrook group of companies only had credit for $11.1 million in U.S. E&S premiums in the third quarter, whereas it wrote $50.5 million in the second quarter,” said SNL.