The 25 Strongest Auto Insurers
By: manybanking.com Staff

by Melissa Gannon, TheStreet.com

The 25 most financially sound auto insurers have at least one thing in common: A dedication to conservative underwriting and investment practices that have positioned them well in the economic downturn.

TheStreet.com Ratings recently completed its quarterly review of the financial strength of auto insurance companies, identifying 25 widely available companies worthy of an "excellent" financial strength rating of A+, A, or A-. The companies on the list are those that had total annual premium volume in 2007 (the most recent full-year data available) of $100 million or more, indicating that they offer coverage in several states. To compare auto rates in your area, use sbup's insurance center.

TheStreet.com Ratings determines the financial strength of an insurance company through measuring a company's performance over time in many areas, including capitalization, profitability, reserve adequacy, liquidity and stability of operations. Insurers with the highest financial strength ratings are those with conservative underwriting practices that accurately price the risks they assume and set aside a sufficient amount of reserves to pay future claims while consistently earning profits to build capital.

High-rated companies may suffer problems during difficult economic times, but because of their historically sound practices, they have the capital built up to withstand tough times.

25 Strongest Auto Insurers
Company
Domicile State
TheStreet.com Financial Strength Rating
2007 Annual Auto Premium ($Mil)
UNITED SERVICES AUTOMOBILE ASN
Texas
A+
3,256.0
USAA CASUALTY INS CO
Texas
A+
2,121.9
INTERINS EXCH OF THE AUTOMOBILE CLUB
Calif.
A+
1,841.8
MERCURY INS CO
Calif.
A
1,360.2
AUTO-OWNERS INS CO
Mich.
A
866.4
COUNTRY MUTUAL INS CO
Ill.
A
466.1
HOME-OWNERS INS CO
Mich.
A
437.7
KENTUCKY FARM BUREAU MUTUAL INS CO
Ky.
A
424.6
DAIRYLAND INS CO
Wis.
A
345.5
FRANKENMUTH MUTUAL INS CO
Mich.
A
129.0
ALLSTATE INS CO
Ill.
A-
7,649.6
CALIFORNIA STATE AUTO ASN INTER-INS
Calif.
A-
1,504.0
CINCINNATI INS CO
Ohio
A-
760.4
MERCURY CASUALTY CO
Calif.
A-
566.4
SOUTHERN FARM BUREAU CAS INS CO
Miss.
A-
566.4
TENNESSEE FARMERS MUTUAL INS CO
Tenn.
A-
501.5
OWNERS INS CO
Ohio
A-
476.1
GRANGE MUTUAL CAS CO
Ohio
A-
441.7
NORTH CAROLINA FARM BU MUTUAL INS CO
N.C.
A-
418.5
FARM BUREAU MUTUAL INS CO
Iowa
A-
374.1
AMERICAN NATIONAL PROPERTY & CAS CO
Miss.
A-
321.9
UNITED FARM FAMILY MUTUAL INS CO
Ind.
A-
266.2
STATE FARM CTY MUTUAL INS CO OF TX
Texas
A-
203.7
USAA GENERAL INDEMNITY CO
Texas
A-
192.6
COOPERATIVA D SEGUROS MULTIPLES D PR
P.R.
A-
133.1
A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak

The top two insurers on our list, United Services Automobile Association and USAA Casualty Insurance Co., are not household names, but reach a sizable amount of customers. While they only sell coverage to those in the military and their families, memberships are for life -- meaning the child of a current or former military person who joins can go on to cover spouses and children, and so forth. The club gets pretty big as evidenced by the $5.3 billion in premiums these two companies collected in 2007, plus the additional $193 million in premiums collected by USAA General Indemnity, further down on the list.

Third on the list, Interinsurance Exchange of the Automobile Club is actually more familiar than people might think. It underwrites the auto coverage for the American Automobile Association. The nationwide AAA often offers discounted coverage to its members, so it is definitely worth checking out the rates from this financially strong insurer.

 

The most familiar name on the list is Allstate Insurance Co., a unit of Allstate Corp. , with an A- financial strength rating. Although Allstate has taken its share of knocks during this financial crisis, the auto insurer is sound.

 

Most of the other companies on the list are regional insurers that may not offer coverage in all states, but there are definitely several choices for any individual state.


25 Largest Auto Insurers

Absent from the list of 25 strongest auto insurers are many household names. This doesn't mean those companies are not financially sound; they simply are not at the very top of our rankings for financial strength. The list of largest auto insurers includes those with annual premiums of $1 billion or more.

 

25 Largest Auto Insurers
Company
Domicile State
TheStreet.com Financial Strength Rating
2007 Annual Auto Premium ($Mil)
STATE FARM MUTUAL AUTOMOBILE INS CO
Ill.
B+
27,367.7
ALLSTATE INS CO
Ill.
A-
7,649.6
GEICO GENERAL INS CO
Md.
B+
4,810.6
ALLSTATE PROPERTY & CASUALTY INS CO
Ill.
B
3,851.1
GOVERNMENT EMPLOYEES INS CO
Md.
B+
3,504.7
NATIONWIDE MUTUAL INS CO
Ohio
B
3,469.4
ALLSTATE INDEMNITY CO
Ill.
B
3,299.2
UNITED SERVICES AUTOMOBILE ASN
Texas
A+
3,256.0
LIBERTY MUTUAL FIRE INS CO
Wis.
B-
3,155.5
AMERICAN FAMILY MUT INS CO
Wis.
B
3,014.9
GEICO INDEMNITY CO
Md.
B+
2,859.0
FARMERS INS EXCHANGE
Calif.
C
2,349.1
USAA CASUALTY INS CO
Texas
A+
2,121.9
STATE FARM FIRE & CAS CO
Ill.
B
1,937.7
INTERINS EXCH OF THE AUTOMOBILE CLUB
Calif.
A+
1,841.8
MID-CENTURY INS CO
Calif.
C-
1,704.3
ERIE INS EXCHANGE
Pa.
B
1,675.2
PROGRESSIVE DIRECT INS CO
Ohio
C-
1,563.8
CALIFORNIA STATE AUTO ASN INTER-INS
Calif.
A-
1,504.0
ALLSTATE FIRE & CASUALTY INS CO
Ill.
C
1,486.9
COMMERCE INS CO
Mass.
B+
1,377.6
MERCURY INS CO
Calif.
A
1,360.2
21ST CENTURY INS CO
Calif.
B-
1,244.5
NATIONWIDE MUTUAL FIRE INS CO
Ohio
B+
1,206.4
SAFECO INS CO OF ILLINOIS
Ill.
B
1,194.8
FARMERS TEXAS COUNTY MUTUAL INS CO
Texas
C+
1,176.6
PROGRESSIVE NORTHERN INS CO
Wis.
C+
1,143.0
PROGRESSIVE COUNTY MUTUAL INS CO
Texas
C
1,046.1
A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak

 

By far, the largest auto insurer in the nation is State Farm Mutual Automobile Insurance Co. with $27 billion in annual premium. It has a financial strength rating of B+ which puts it (and any other insurer rated B+ or higher) on the list of those companies recommended by TheStreet.com for financial strength.

 

Three units of Berkshire-Hathaway's GEICO are among the largest. So are more Allstate units, three units of Progressive Corp. and two Nationwide units.

 

—For more ways to save, spend, invest and borrow, visit MainStreet.com.

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