U.S. homeowners insurance offers significant growth opportunities, according to Aon Benfield study

Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc (AON), today launches its Homeowners ROE Outlook – 2013 Update report.

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The report, compiled by the firm's Analytics division and updated annually, reviews the industry aggregate state level statutory financial filing information along with rate filings and supporting actuarial information for the 20 top homeowners insurance groups by state. It concludes that insurers' prospective after-tax return-on-equity (ROE) for homeowners insurance is 4.6 percent on a countrywide average, and 8.0 percent excluding Florida.

Positive rate momentum has been evident, as approved rate changes in homeowners lines have averaged a 7.7 percent increase across the U.S. over the past 18 months. Gulf states achieved some of the highest average rate increases, particularly Texas, where rates increased 12.6 percent, while the hurricane-exposed state of Florida average rate increase was 8.2 percent.

The study also reveals strong growth in the homeowners line between 2009 and 2012, with direct written premiums increasing 15 percent countrywide. Only Nevada saw a decline in premium volumes, as written premiums decreased by 1.5 percent during the period. At the same time, personal auto direct written premium growth was only 6.5 percent.

Parr Schoolman, Aon Benfield Global Risk and Capital Strategy Team Leader, said: "Overall, the homeowners line of business is still not producing adequate returns for the industry, but given the recent rate and underwriting actions, for the first time we are seeing an improving outlook for many states, especially in non-coastal regions. Although more can still be done in terms of pricing segmentation, capturing the cost of catastrophe risk in rate filings is becoming a more widespread practice within the industry, which is positive for the long term prospects in this line of business."

To view the full Aon Benfield Homeowners ROE Outlook 2013 Update, please follow the link below:

http://thoughtleadership.aonbenfield.com/Documents/201310_homeowners_roe_outlook.pdf

About Aon Benfield
Aon Benfield, a division of Aon Corporation (AON), is the world's leading reinsurance intermediary and full-service capital advisor. We empower our clients to better understand, manage and transfer risk through innovative solutions and personalized access to all forms of global reinsurance capital across treaty, facultative and capital markets. As a trusted advocate, we deliver local reach to the world's markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial and rating agency advisory. Through our professionals' expertise and experience, we advise clients in making optimal capital choices that will empower results and improve operational effectiveness for their business. With more than 80 offices in 50 countries, our worldwide client base has access to the broadest portfolio of integrated capital solutions and services. To learn how Aon Benfield helps empower results, please visit aonbenfield.com.

About Aon
Aon plc (AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 65,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.

Source: PRNewswire/