Demotech, Inc. Seeks Comments on Life Company Classification System
Demotech, Inc., the first to review and rate independent, regional and specialty Property and Casualty insurers, created its P&C Company Classification System in 2007. We propose a Life Company Classification System and request and encourage your thoughts and comments.
The Demotech Life Company Classification System categorizes individual life insurers, not the groups or families of insurers they belong to, into one of ten categories, based on our analysis of the data reported by the insurers on their 2023 National Association of Insurance Companies annual statements. The intent is to categorize life companies by their business model and scope of operation.
A company cannot be assigned to more than one category. For the purposes of the Demotech Company Classification System, premium includes annuity considerations.
The ten categories comprising Demotech’s Life Company Classification System are described in the table below.
| Classification | Description* | % of Companies |
| Fraternal Benefit Societies | By definition | 9.2% |
| Reinsurers | Substantial assumed premium relative to direct written premium | 4.9% |
| Large Nationals | Greater than $100B of net assets, at least $1M of direct written premium in at least 45 states, and surplus of at least $1B | 3.1% |
| Midsize Near Nationals | Net assets between $500M and $100B, at least $1M of direct written premium in at least 35 states, and surplus of at least $100M | 17.8% |
| Super Regionals | Greater than $100M of net assets, at least $1M of direct written premium in each of 2 to 34 states, and greater than $5M of non-renewal sales | 4.9% |
| Limited New Writings | Independent companies with limited or no new business premium | 11.3% |
| State Specialists | Greater than 90% of direct written premium in any one state | 13.9% |
| Product Specialists | Greater than 90% of direct written premium in one product category (Life, Annuities, Accident & Health, or Deposit-Type) | 10.0% |
| Strategic Subsidiaries | Member of a group of companies used for a specific strategic purpose | 12.7% |
| Regionals | Generally small companies that write more than one product but not nationally | 12.3% |
*Additional criteria not listed may apply
Your thoughts and comments on yet another effort by Demotech to level the playing field should be directed to MCooke@Demotech.com by October 31, 2024.
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