Personal lines insurance: Finding profitable growth

The competition in personal lines insurance is intensifying

The personal lines property and casualty (P&C) insurance market is composed of six primary types of competitors competing for market share in a highly concentrated and mature industry. The arrival of new competitors in the personal lines insurance market, namely InsurTechs and original equipment manufacturers (OEMs), over the last 5-10 years have led to a fiercely intensifying competition.

Carriers can no longer rely on a one-size-fits-all strategy. Given the breadth of competition, carriers need to be laser-focused in the way in which they compete and embrace aligning their business and operating model to a clear, yet distinctive value proposition in the market.

Large publics are dominating, while large mutuals are struggling

Large publics are outperforming the market both from a growth and profitability perspective. They have gained 2.2% market share over the past 5 years and are the only archetype with an average combined ratio below 100% the same period.¹

Growth and profitability matrix for top 10 personal lines insurance carriers

Notes: 

1. Profitability is measured as average combined ratio over the past five years (2018–2022).
2. Growth is measured as the CAGR in DPW over the past five years (2018–2022).
3. Top 10 market average is based on simple average.

Unlocking profitable growth in personal lines insurance

The path to outperforming the market is not a straight line. Larger players have the investment and scale advantage to focus on many, if not all, strategic capabilities and to take on more than one strategic choice in the context of both their core and adjacent businesses. Success will likely be defined by how well investments are connected to the needs of their customers and agents as well as the ability to execute against the chosen strategies.

However, midsize and niche players will need a clear strategic focus to choose the right opportunities to defend and expand their niche. Their scale makes it challenging to compete head-on with large players that have the demand and scale advantage; therefore, they need to focus on strategies that enable them to build a clear value proposition and corresponding capabilities to win in their target market.

Learn more about how carriers with the right strategic focus can position themselves to take advantage of available opportunities in our full report.

End notes

¹S&P statutory filings.