Cash vs. replacement: U.K. homeowners insurers are doling out replacement goods instead of cash settlements on claims, while U.S. insurers are doing just the opposite.

Imagine responding to an insurance claim for a Sony TV and telling the policyholder that instead of receiving a check in the mail, shell be getting a replacement TV from the insurer's preferred electronics supplier. Or in lieu of a $10,000 check to replace his grandmother's stolen pearls, he'll get a $10,000 voucher to shop at one of the insurer's preferred jewelers.

Or, if they really complain, they can receive a check--but for less than the settlement price.

That's often the case in the United Kingdom, where such replacement settlements are known as "like for like," and most homeowners insurers are saving money by buying replacement items in bulk from a preferred group of suppliers. While the practice of "like for like" has been burgeoning in the United Kingdom since the 1990s, it's been waning in the United States for about as many years.

American policyholders, it seems, prefer a cash settlement--and freedom of choice.

"It used to be that way," noted JoAnne Murray, president of the Independent Insurance Agents of Westchester County, an arm of the Independent Insurance Agents and Brokers of New York. Though some smaller companies probably still do offer replacement settlements, she said, for the most part, those days are long over in the United States.

"None of them are forcing it. If they do offer it, it's an option, but it's not a 'you have to do this,'" said Murray, president of the Allan M. Block Agency Inc. in Tarrytown, N.Y., which represents 10 insurers, including MetLife, The Hartford, St. Patti Travelers and Chubb.

Many U.S. companies have shied away from replacement claims due to the increased competitiveness of the electronics industry; they'd rather provide a claimant with a cash payout than squabble over brand names and model numbers, Murray said. Replacement settlements were once common in the United States, but faded away within the last decade.

"Years ago jewelry was in the program. They could replace it for you, but it was just horrible" she said. "People would argue about the piece their mother gave them, and what you wanted to replace it with wasn't the same. Then they'd say, 'Well I've been paying a premium on a $10,000 piece, and the company wants to replace it with a $5,000 piece?'"

Somewhere along the line, the U.S. insurance industry began to see that the practice just wasn't worth the trouble, Murray said: "Some light bulb went off and they said, 'You know, if we were collecting the premium for $10,000, why don't we just give them the $10,000 and walk away from it?'"

Dual Policies

In the United Kingdom, homeowners policies are divided into two types: building insurance, which covers the structure of the home, and contents insurance, which covers the furniture and other items that policyholders would take away if they moved. Both types protect against such risks as fire, subsidence (when a house slides on muddy or otherwise unstable ground), theft, flood, storm and liability. Policyholders can choose different insurers for their building and contents.

In the United States, most homeowners policies cover both the building and the contents with the exception of renters' and condominium insurance, which covers the contents; the landlord or condo association usually insures the structure. And flood insurance is purchased separately. Most U.S. homeowners insurance policies today are "new for old"--a claimant gets the replacement value of a new product to replace a stolen or damaged one, Murray said.

American policyholders, like Murray's son-in-law who "researches to death" electronic equipment before he buys it, wouldn't want an insurance agent delivering a replacement product that differs from the one he lost, she said. "From an agent's perspective, I would think that customers would not appreciate that," Murray said. Besides, what usually differentiates one insurer from another in this country, she said, is the level of service provided, so it's advantageous for an insurer to settle a claim quickly: "When you put cash in their hand, it's over."

Leading U.K. insurers Direct Line, Norwich Union and Zurich UK all participate in "like for like" settlements, citing cost savings, customer convenience and a fraud deterrent.

"We have a list of suppliers we like to use," said Sally Leeman, a spokesperson for Norwich Union. Norwich is an arm of Aviva, the United Kingdom's biggest insurance group and the sixth-largest worldwide. "We reap the benefit of some discount, which is beneficial for everyone, really. It keeps costs lower and keeps premiums lower in the long run."

"Our experience is that the majority of customers are very happy with our offer of replacement goods rather than cash settlement," Leeman said. Norwich uses a list of preferred jewelers for jewelry claims. "If it's an heirloom that can't be replaced, we will look at it as an individual; it's not a blanket settlement. If you can replace it we'd prefer to do it that way, but we can do a cash settlement for items that can't be replaced. We will look at those on an individual basis, but on the whole, we prefer to replace with something from our suppliers if we can."

"Like for like" settlements cut down on fraud, a real problem in the United Kingdom, Leeman explained: "It's probably the same in the States: Fraud is a major factor to consider. Doing it this way does combat that to a degree."

Murray concurred; if a policyholder were to receive a replacement product in lieu of a "fat check," it would send a clear message: "You're not going to get rich here." But U.S. insurers saw that the practice could also deter honest customers--those preferring a check might feel the insurer is targeting them as a potential fraud risk.

U.S. insurers have since developed other ways to thwart fraudulent claims. Most policies issued by the Allan Block Agency have a "holdback," which means policyholders receive a partial payment up front and the balance when they prove their claimed goods have been replaced. Say a client is due a $10,000 payout for ruined appliances due to a power surge: "The insurer might hold back $3,000 and say, 'when you get all your receipts, we'll give you the rest,'" Murray said.

As for jewelry claims in the United States, the industry has been moving toward the use of agreed value during the past 10 years, Murray said. "I won't sell a policy without it. It means that whatever we write the policy for is what we write the check for." It differs from actual cash value, which pays damages equal to the replacement value of damaged property, minus depreciation.

Back in the States

There are still some U.S. companies who do offer replacement products as an option because policyholders perceive value in the practice, and there are situations in which a customer might actually jump at it.

"There are some customers who work 7-to-7. They say, 'You can get that same TV for me? Great, have it delivered," Murray said. "For somebody like me who doesn't get out of here until 9 p.m., it would be great."

Among the U.S. companies who offer replacement settlements, it's up to an agent to offer the policyholder a choice: cash settlement or replacement settlement. If no choice is made, replacement reigns as the default.

At Encompass Insurance, for example, if an agent or policyholder does not check off a box that states the customer wants agreed value on an item, the policy will be written for replacement value, Murray said. Other companies such as MetLife, St. Paul Travelers and Chubb offer cash settlements automatically.

"It's an educating process to try to make sure people understand," Murray said.

Tony LeFevre, managing director for Loss Management Group, the United Kingdom's largest jewelry claims management firm, has written extensively about homeowners replacement claims in the United Kingdom. Customers who "vehemently" object to replacement settlements are allowed cash, but then at a discounted cost of the replacement goods, he said.

"By and large," LeFevre said, "U.K. insurers get away with this practice with only a small reduction in goodwill."

Earlier this year, LeFevre and LMG commissioned a survey asking consumers how they thought their insurer would resolve a claim. Of the 1,037 Britons who took part, 60% said they expected the settlement to be cash or a check; only 5% knew they'd receive a voucher for a replacement item at a specified outlet. The study, which took place from April 29 through May 1, was conducted by U.K. firm Market & Opinion Research International.

"The problem we Fred most is that most insureds never make claims," LeFevre said. "The majority never make a claim, and they're not sure what's going to happen when that claim happens."

And so, what U.K. policyholders expect vs. what actually happens often leads to conflict, LeFevre said: "The consensus seems to be they expect cash. When they're told they can't expect cash for Granny's diamond ring, which you never liked anyway, there's a bit of confrontation."

Still, some 50% of U.K. policyholders like the replacement goods, LeFevre said. Yearly cost to the United Kingdom's insurance industry for lost and stolen jewelry is about 300 million, he said. Most homeowners policies in the United Kingdom offer contents protection on single items up to 1,500 (about $2,650).

U.K. insurers would probably still use replacement settlements over cash whether the public favored it or not, LeFevre hinted.

"It actually has nothing to do with ideals or philosophies and everything to do with money," LeFevre said. "The reason why U.K. insurers started to offer replacement and all that 10 to 15 years ago is they realized they were losing loads of money on homeowners insurance, and how could they cut the costs?"

"The huge difference between cash settlements and replacement settlements is that with the cash settlement regime, it's the consumer that picks up the discount on the purchase of the goods, and with replacement goods, it's the insurance company [that] picks up the discount," LeFevre explained. "When you're talking about millions and millions of pounds, this comes to quite a lot of money."

In the United States, the pressure from the agents' side has been to offer policyholders agreed value and just write the check, Murray said. "The sooner you put money in a customer's hand, the happier they are. No one has that kind of time to run around from jeweler to jeweler."

Making a Choice

Allstate, the largest publicly-held personal lines insurer in the United States, provides cash settlements on all of its homeowners claims.

"We don't go out and physically provide them with a replacement item or a voucher," said Allstate spokesperson Bill Mellander, who has been working with hurricane- and flood-ravaged policyholders in Louisiana. "We provide them with financial reimbursement per what is offered and available through their policy. It's up to the customer to go out and determine when and how they are going to replace their damaged or stolen items."

The two leading U.K. insurers' groups, the British Insurance Brokers Association and the Association of British Insurers, offer tips to alert policyholders to replacement settlements. The ABI Web site offers this general advice: "Your insurer may seek to replace damaged items through a nominated retailer. You cannot insist on a cash settlement, although if the item concerned isn't generally available a cash settlement will normally be made."

Peter Staddon, head of technical services for BIBA, said insurers can achieve a major cost savings by buying items such as carpet in bulk, simply because the flooring trend in the United Kingdom is moving toward laminated floors and away from carpeting. Norwich Union has purchased and distributed enough replacement carpeting to policyholders in recent months to cover the square footage of five football fields, he said.

"The major insurers, when approaching a manufacturer, can make a deal. If it's 20 [pounds sterling] a meter, they can get it for 10 [pounds sterling]," Staddon said. "They can't sell it; nobody is interested in carpets."

Staddon said if the public trend in the United Kingdom were to follow that of the United States toward cash settlements, U.K. insurers might start to follow suit as well. There has been talk around the United Kingdom that insurers may revert to cash settlements, LeFevre noted.

"Like everything else, it's cyclical," LeFevre said. But he doubts U.K. insurers would want to give up the cost savings associated with replacement settlements. LMG manages to replace items, instead of issuing a check, about 70% of the time, he added.

"We do that by offering a huge range of choices in terms of shops that you can use and other mechanisms," LeFevre said. And choices make policyholders happy, whether it's in the United States or the United Kingdom. "If you choose one jewelry shop in our world and tell the customer to go there, they will find a million reasons why they can't go there," he said.

Key Points

* U.K. homeowners insurers prefer replacement goods over cash settlements, citing cost savings, customer convenience and a deterrent to fraud.

* U.S. homeowners insurers prefer cash settlements, since policyholders want freedom of choice, ease of replacement and speedier claims settlements.

* Most U.K. policyholders surveyed this year did not know that they would receive goods in lieu of a cash settlement.

Learn More

MetLife Auto & Home Group

A.M. Best Company # 18552

Distribution: Work-site program, independent agents, career agents and direct marketing

Hartford Fire Insurance Co.

A.M. Best Company # 02231

Distribution: independent agents, AARP Homeowners Insurance Program

Travelers Indemnity Co.

A.M. Best Company # 02520

Distribution: Independent agents and brokers

Chubb Group of Insurance Companies

A.M. Best Company # 00012

Distribution: Independent agents and brokers

Encompass Insurance Co.

A.M. Best Company # 11794

Distribution: Independent agents

Allstate Insurance Group

A.M. Best Company # 00008

Distribution: Independent agents

Direct Line Insurance plc

A.M. Best Company # 87316

Distribution: Captive agents, direct

Norwich Union insurance Ltd.

A.M. Best Company # 85250

Distribution: IFA relationships, brokers, bancassurance, direct sales force, corporate partnerships, direct

For ratings and other financial strength information about these companies, visit www.ambest.com

What's in Your Policy?

United Kingdom-based claims management firm Loss Management
Group commissioned a survey on customers' expectations of replacement
following a jewelry theft claim. The study was conducted from April 29
through May 1 and included 1,037 respondents.

If your jewelry was stolen, how would you expect your insurer to settle
your claim? Would you expect the claim to be settled ...

                                    Men   Women   Employed   Unemployed

In cash or check to the value of    60%    59%      59%         60%
the stolen jewelry
By voucher for replacement by a      4%     7%       5%          7%
jeweler of the insurer's choice
By voucher for replacement by a     17%    19%      21%         13%
jewelry shop of my own choice
By sending a professional jeweler    8%     7%       7%          8%
to my home so I can choose
jewelry

Source: Market & Opinion Research International

Homeowners Multiple Peril, Top Writers, United States--2004

Rank is based on 2004 direct premiums written.
($ Thousands)

                                               2004 Direct            %
                                                  Premiums    Change in
Rank    Group                         AMB #        Written     Premiums

   1    State Farm Group              00088    $11,916,227          9.8
   2    Allstate Ins Group            00008      6,011,285         10.8
   3    Farmers Ins Group             00032      3,775,613          5.9
   4    Nationwide Group              05987      2,514,624         10.0
   5    St Paul Travelers Cos         18647      2,281,516         21.8
   6    USAA Group                    04080      2,079,250         15.3
   7    Liberty Mutual Ins Cos        00060      1,600,873         11.9
   8    Chubb Group of Ins Cos        00012      1,488,386          8.8
   9    Amer Family Ins Group         00124      1,437,728         15.5
  10    Hartford Ins Group            00048        868,429         11.7
  11    Auto-Owners Ins Group         04354        795,572         12.3
  12    Safeco Ins Cos                00078        794,072         -0.3
  13    MetLife Auto & Home Group     18552        755,353          4.2
  14    Ede Ins Group                 04283        735,894         19.2
  15    Southern Farm Bureau Group    02962        519,772         11.5
  16    Allianz of America Inc        18429        502,815          4.5
  17    CNA Ins Cos                   18313        502,192         -4.0
  18    Amer Intl Group Inc           18540        451,695          7.7
  19    Allmerica Finl P&C Cos        04861        434,883          3.6
  20    Arnica Mutual Group           18522        368,069         17.1
  21    Vesta Ins Group               05681        360,082         -3.8
  22    CA State Auto Group           18460        352,183         15.0
  23    Country Ins & Finl Svcs       00302        337,873         16.0
  24    Cincinnati Ins Cos            04294        287,315          9.4
  25    Poe Ins Group                 18554        282,092         85.6

        Top 25 P/C Writers                     $41,453,793         10.6
        Total U.S. P/C Industry                $53,071,557          9.5

           Market Share (%)        Adjusted Loss Ratios           % of
                                                               Company
Rank     2004     2003     2002     2004     2003     2002    Premiums

   1     22.5     22.4     22.3     64.6     60.6     73.1        25.3
   2     11.3     11.2     11.5     69.9     52.4     61.2        24.3
   3      7.1      7.4      7.9     43.7     52.1     67.7        26.7
   4      4.7      4.7      4.6     65.3     64.9     62.3        17.1
   5      4.3      3.9      3.6     43.1     51.3     58.8        10.3
   6      3.9      3.7      3.6     68.1     61.4     59.7        25.5
   7      3.0      3.0      2.9     62.1     59.6     64.2        10.1
   8      2.8      2.8      2.8     56.2     61.6     60.8        15.5
   9      2.7      2.6      2.3     51.1     57.5     67.4        24.0
  10      1.6      1.6      1.6     80.2     53.7     57.3         7.7
  11      1.5      1.5      1.3     93.5     71.8     81.2        18.2
  12      1.5      1.6      1.8     40.4     50.8     65.7        14.1
  13      1.4      1.5      1.6     52.7     52.0     54.0        25.0
  14      1.4      1.3      1.2     45.6     72.5     85.7        18.4
  15      1.0      1.0      1.0    110.7     60.5     86.1        24.1
  16      0.9      1.0      1.1     56.6     56.1     62.0        10.5
  17      0.9      1.1      1.2     57.4     74.9     60.8         4.6
  18      0.9      0.9      0.7     71.9     53.6     60.4         1.6
  19      0.8      0.9      0.9     57.2     57.5     58.6        17.9
  20      0.7      0.6      0.6     68.5     67.5     69.6        26.3
  21      0.7      0.8      0.8     65.7     56.5     47.9        64.0
  22      0.7      0.6      0.6     31.6     34.4     63.4        16.4
  23      0.6      0.6      0.5     43.7     54.6     60.7        20.8
  24      0.5      0.5      0.6     85.1     79.8     86.2         9.1
  25      0.5      0.3      0.2    156.3     32.7     39.8        63.0

         78.1     77.3     77.1     62.1     58.0     66.4        16.7
        100.0    100.0    100.0     65.9     59.5     66.1        11.4

Source: A.M. Best Statement Products: State/Line. For more information
about custom data, call [phone], Ext. 5383.

Homeowners Multiple Peril, Top Writers by State--2004

Rank is based on direct premiums written in 2004.
($Thousands)

                                     Direct    % of
                      No. of       Premiums    U.S.      Premium
State         Rank    Cos.          Written    Total    % Change

Ala.            23       198       $917,279      1.7        12.0
Alaska          48        76        107,922      0.2        11.5
Ariz.           20       227      1,018,700      1.9        11.7
Ark.            32       190        462,911      0.9         8.7
Calif.           1       262      5,876,021     11.1        10.3
Colo.           16       210      1,087,800      2.0         9.1
Conn.           27       190        789,133      1.5        10.0
Del.            45       160        130,990      0.2        15.7
D.C.            50       128         98,940      0.2        12.4
Fla.             3       276      4,362,572      8.2        14.9
Ga.             10       271      1,406,512      2.7        13.8
Hawaii          41        86        215,785      0.4        15.3
Idaho           43       173        169,475      0.3         7.3
Ill.             5       323      2,177,417      4.1         8.6
Ind.            14       264      1,169,458      2.2         8.9
Iowa            33       216        425,310      0.8         7.9
Kan.            29       216        613,563      1.2         9.1
Ky.             28       224        617,357      1.2        11.3
La.             22       195        924,986      1.7         4.8
Maine           39       146        239,463      0.5        10.5
Md.             18       222      1,020,946      1.9        16.2
Mass.           13       211      1,249,103      2.4        10.4
Mich.            6       194      2,140,242      4.0         7.6
Minn.           15       229      1,131,619      2.1         8.2
Miss.           30       181        545,493      1.0        14.5
Mo.             17       238      1,064,807      2.0         9.8
Mont.           44       140        157,043      0.3         8.0
Neb.            35       186        347,237      0.7         9.6
Nev.            34       176        384,665      0.7        15.0
N.H.            40       156        238,022      0.4        12.2
N.J.             9       212      1,476,516      2.8        11.4
N.M.            38       179        265,643      0.5         8.2
N.Y              4       274      3,164,001      6.0         9.3
N.C.            11       222      1,333,356      2.5         9.2
N.D.            49       141         99,886      0.2        10.7
Ohio             8       283      1,734,159      3.3         9.7
Okla.           26       197        791,807      1.5         7.4
Ore.            31       202        501,210      0.9         9.1
Pa.              7       298      2,063,587      3.9         9.8
R.I.            42       148        200,858      0.4        12.3
S.C.            24       217        848,922      1.6        14.9
S.D.            47       164        107,929      0.2         6.5
Tenn.           19       254      1,020,192      1.9        11.2
Texas            2       275      4,518,775      8.5        -1.1
Utah            37       191        277,951      0.5         5.9
Vt.             46       151        128,864      0.2        11.8
Va.             12       241      1,259,698      2.4        12.9
Wash.           21       211      1,006,313      1.9        10.3
W.Va.           36       149        290,004      0.5        16.5
Wis.            25       274        794,720      1.5        10.2
Wyo.            51       133         96,395      0.2        10.3

U.S. Total             1,081    $53,071,557    100.0         9.5

                                            Market Share

                                         Agency         Direct
State         ALR (1)    DDCCE (2)    Writer (3)    Writer (4)

Ala.            147.1          2.2          20.8          79.2
Alaska           44.6          2.3          14.6          85.4
Ariz.            33.9          1.7          24.1          75.9
Ark.             43.9          1.0          15.3          84.7
Calif.           31.0          3.0          26.1          73.9
Colo.            60.7          1.4          19.0          81.0
Conn.            41.5         -1.9          56.2          43.8
Del.             41.3          1.2          32.3          67.7
D.C.             31.3          0.9          51.1          48.9
Fla.            305.0          4.2          46.0          54.0
Ga.              61.4          1.9          28.8          71.2
Hawaii           30.4          1.8          50.7          49.3
Idaho            41.8          1.6          29.8          70.2
Ill.             45.4          1.4          21.8          78.2
Ind.             43.5          1.2          34.0          66.0
Iowa             44.8          0.7          29.2          70.8
Kan.             35.1          0.5          23.2          76.8
Ky.              55.8          1.0          31.8          68.2
La.              35.1          1.5          18.8          81.2
Maine            44.0          1.4          57.7          42.3
Md.              39.0          1.2          40.4          59.6
Mass.            46.3          2.0          82.2          17.8
Mich.            49.2          1.2          44.5          55.5
Minn.            31.9          1.0          25.9          74.1
Miss.            48.1          1.2          12.1          87.9
Mo.              59.8          0.7          20.2          79.8
Mont.            30.9          1.6          34.8          65.2
Neb.             53.5          0.8          28.8          71.2
Nev.             41.3          2.2          19.8          80.2
N.H.             47.0          1.7          48.4          51.6
N.J.             59.8          3.6          59.0          41.0
N.M.             61.3          2.1          21.5          78.5
N.Y              47.9          2.6          49.3          50.7
N.C.             44.3          0.9          27.6          72.4
N.D.             28.2          0.2          33.0          67.0
Ohio             61.3          1.5          44.4          55.6
Okla.            60.2          1.2          21.7          78.3
Ore.             40.7          1.6          23.6          76.4
Pa.              48.7          1.9          47.0          53.0
R.I.             47.2          1.3          47.4          52.6
S.C.             40.8          0.9          28.1          71.9
S.D.             31.0          0.6          37.2          62.8
Tenn.            45.4          0.9          25.4          74.6
Texas            28.3          2.3          23.9          76.1
Utah             44.4          1.7          21.1          78.9
Vt.              47.8          1.8          53.6          46.4
Va.              37.2          0.8          30.2          69.8
Wash.            43.0          1.9          36.6          63.4
W.Va.            48.2          1.8          36.6          63.4
Wis.             47.5          1.1          39.1          60.9
Wyo.             25.1          0.8          24.1          75.9

U.S. Total       65.9          1.9          34.4          65.6

                                           % Market
State         Leading Writer                  Share

Ala.          State Farm Group                 30.0
Alaska        State Farm Group                 35.0
Ariz.         State Farm Group                 20.4
Ark.          State Farm Group                 25.5
Calif.        State Farm Group                 22.3
Colo.         State Farm Group                 24.5
Conn.         Allstate Ins Group               11.4
Del.          State Farm Group                 29.3
D.C.          State Farm Group                 23.9
Fla.          State Farm Group                 23.7
Ga.           State Farm Group                 32.5
Hawaii        State Farm Group                 25.5
Idaho         State Farm Group                 18.8
Ill.          State Farm Group                 32.3
Ind.          State Farm Group                 26.3
Iowa          State Farm Group                 24.2
Kan.          State Farm Group                 23.7
Ky.           State Farm Group                 21.4
La.           State Farm Group                 34.7
Maine         White Mountains Ins Group        11.3
Md.           State Farm Group                 22.1
Mass.         Commerce Group Inc                9.7
Mich.         State Farm Group                 19.4
Minn.         State Farm Group                 23.3
Miss.         State Farm Group                 30.4
Mo.           State Farm Group                 24.1
Mont.         State Farm Group                 24.3
Neb.          State Farm Group                 24.8
Nev.          Farmers Ins Group                21.9
N.H.          Liberty Mutual Ins Cos           13.6
N.J.          State Farm Group                 13.8
N.M.          State Farm Group                 27.4
N.Y           Allstate Ins Group               17.9
N.C.          State Farm Group                 19.1
N.D.          State Farm Group                 18.4
Ohio          State Farm Group                 22.4
Okla.         State Farm Group                 27.4
Ore.          State Farm Group                 27.0
Pa.           State Farm Group                 18.8
R.I.          Arnica Mutual Group              11.9
S.C.          State Farm Group                 25.9
S.D.          State Farm Group                 21.1
Tenn.         State Farm Group                 26.5
Texas         State Farm Group                 29.6
Utah          State Farm Group                 21.4
Vt.           T Mutual Group                   15.0
Va.           State Farm Group                 21.4
Wash.         State Farm Group                 19.4
W.Va.         State Farm Group                 26.1
Wis.          Amer Family Ins Group            26.6
Wyo.          State Farm Group                 27.0

U.S. Total    State Farm Group                 22.5

                                           % Market
State         Second Leader                  Share

Ala.          Alfa Ins Group                   20.8
Alaska        Allstate Ins Group               29.8
Ariz.         Farmers Ins Group                17.1
Ark.          South Farm Bureau Group          22.1
Calif.        Farmers Ins Group                16.6
Colo.         Farmers Ins Group                16.2
Conn.         Chubb Group of Ins Cos           10.8
Del.          Nationwide Group                 17.1
D.C.          St. Paul Travelers Cos           22.2
Fla.          Allstate Ins Group               10.8
Ga.           Allstate Ins Group               12.7
Hawaii        Zephyr Ins Co Inc                15.5
Idaho         Farmers Ins Group                16.8
Ill.          Allstate Ins Group               14.5
Ind.          United Farm Bureau IN             9.1
Iowa          Nationwide Group                 15.4
Kan.          Amer Family Ins Group            17.7
Ky.           KY Farm Bureau Group             20.5
La.           Allstate Ins Group               20.8
Maine         State Farm Group                 11.0
Md.           Allstate Ins Group               13.5
Mass.         Andover Cos                       8.7
Mich.         Auto-Owners Ins Group            14.4
Minn.         Amer Family Ins Group            15.8
Miss.         South Farm Bureau Group          21.0
Mo.           Amer Family Ins Group            22.4
Mont.         Farmers Ins Group                15.6
Neb.          Amer Family Ins Group            13.9
Nev.          State Farm Group                 20.6
N.H.          State Farm Group                 10.8
N.J.          Allstate Ins Group                9.4
N.M.          Farmers Ins Group                20.4
N.Y           State Farm Group                 14.3
N.C.          Nationwide Group                 16.8
N.D.          Amer Family Ins Group            17.9
Ohio          Nationwide Group                 10.6
Okla.         Farmers Ins Group                20.6
Ore.          Farmers Ins Group                18.5
Pa.           Erie Ins Group                   14.4
R.I.          Allstate Ins Group                9.6
S.C.          Allstate Ins Group               14.7
S.D.          Amer Family Ins Group            18.9
Tenn.         TN Farmers Ins Cos               17.1
Texas         Allstate Ins Group               16.2
Utah          Allstate Ins Group               19.8
Vt.           Co-Operative Ins Cos             10.4
Va.           Allstate Ins Group               11.9
Wash.         Farmers Ins Group                16.7
W.Va.         Nationwide Group                 19.1
Wis.          State Farm Group                 15.2
Wyo.          Farmers Ins Group                15.8

U.S. Total    Allstate Ins Group               11.3

(1) ALR: Adjusted loss ratio is direct losses incurred divided by the
difference between direct premiums earned and dividends paid to
policyholders.

(2) DDCCE: Direct defense and cost-containment expense ratio is the
former allocated loss adjustment expense (ALAE) ratio.

(3) Insurers that distribute primarily through independent agents.

(4) Insurers that distribute primarily through a direct-selling system
or an exclusive agency system.

Source: A.M. Best Statement Products: State/Line. For more information
about custom data, call [phone], Ext. 5383.