Car insurance premium revenue grew faster in the first quarter of 2013 than in any first quarter of the last nine years, according to a report by SNL Financial, a global business intelligence firm.
Direct written premiums rose 4.18 percent for the industry to $47.39 billion, compared to first quarter 2012. The 30 largest auto insurance companies did even better, with year-over-year premium revenue growing 4.36 percent to $39.86 billion, SNL said.
Companies in the last few years were forced to raise prices to offset low investment returns stemming from historically low interest rates following the recession. They also had to pay out billions in disaster claims for a string of catastrophes.
"Mid- to high-single-digit percentage hikes became the norm, with some seeking even greater increases early on," the SNL report said. "That activity is only now showing signs of slowing, just as companies' higher-priced policies are juicing their top-line results."
The five largest insurers by direct premium written in the first quarter of 2013, according to SNL, were:
- State Farm, $8.4 billion.
- GEICO, $4.7 billion.
- Allstate, $4.5 billion.
- Progressive, $3.9 billion.
- Farmers Insurance, $2.6 billion.