III - STANDARD LINES PREMIUMS

WHAT IT DOES

STANDARD LINES PREMIUMS

COMMERCIAL LINES INSURANCE

The commercial lines sector of the property/casualty insurance industry generally provides insurance products for businesses as opposed to the personal lines sector, which offers products for individuals. However, the division between commercial and personal coverages is not precise. Inland marine insurance, which is included in the commercial lines sector, may cover some personal property such as expensive jewelry, fine art and other items whose values are above the standard homeowners policy limits.

WORKERS COMPENSATION INSURANCE, 1999-2007

			Combined ratio (2)
Year	Net premiums written (1) ($000)	Annual percent change	Calendar year (3)	Annual point change	Accident year (3)	Annual point change
1999	$23,090,325	-4.7%	120.0	NA	142	9 pts.
2000	26,185,928	13.4	114.9	-5.1 pts.	136	-6
2001	27,123,299	3.6	117.3	2.4	123	-13
2002	30,612,127	12.9	108.7	-8.6	105	-18
2003	32,919,340	7.5	108.9	0.2	96	-9
2004	36,734,514	11.6	105.5	-3.4	88	-8
2005	39,724,580	8.1	100.5	-5.0	85	-3
2006	41,820,358	5.3	93.8	-6.7	84	-1
2007	40,858,588	-2.3	99.3	5.5	92 (4)	8
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calendar year data are from National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC.,calculated from unrounded data. Accident year data are from the National Council on Compensation Insurance. (4) Estimated by NCCI. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC; National Council on Compensation Insurance.

COMMERCIAL AUTOMOBILE INSURANCE

Commercial automobile insurance protects businesses against property damage and legal liability associated with the operation of the vehicles a company owns. In addition, businesses may also buy insurance covering their liability for their employees’ use of automobiles not owned by the business, including personally owned cars as well as rented, leased or borrowed vehicles.

COMMERCIAL AUTOMOBILE INSURANCE, 1999-2007

($000)

	Liability				Collision and comprehensive
Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$12,979,182	-2.1%	120.5	NA	$5,381,430	5.4%	111.5	NA
2000	13,734,120	5.8	122.0	1.5 pts.	6,070,862	12.8	104.8	-6.7 pts.
2001	15,270,917	11.2	122.8	0.8	6,459,093	6.4	101.7	-3.1
2002	17,232,258	12.8	108.1	-14.7	7,322,301	13.4	93.6	-8.1
2003	18,444,917	7.0	99.5	-8.6	7,018,962	-4.1	83.7	-9.9
2004	19,569,829	6.1	96.8	-2.6	7,149,217	1.9	82.9	-0.8
2005	19,847,138	1.4	91.8	-5.0	6,951,211	-2.8	88.0	5.2
2006	19,704,064	-0.7	95.5	3.7	6,949,355	0.0	88.0	0.0
2007	18,995,816	-3.6	95.4	-0.1	6,657,227	-4.2	91.0	3.0
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

GENERAL LIABILITY INSURANCE

General liability insurance covers the liability risks of a business arising from injuries or property damage that is caused by its products, completed jobs, premises and operations. It consists of two lines of insurance: "products liability" and "other liability."

GENERAL LIABILITY INSURANCE, 1999-2007

Total ($000)

Year	Net premiums written (1)	Annual percent change
1999	$19,163,683	-1.0%
2000	20,127,095	5.0
2001	23,451,789	16.5
2002	31,129,659	32.7
2003	38,876,428	24.9
2004	43,154,562	11.0
2005	42,924,597	-0.5
2006	45,844,851	6.8
2007	44,682,791	-2.5

Products Liability ($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$1,586,915	-2.4%	159.1	NA
2000	1,413,984	-10.9	130.7	-28.4 pts.
2001	2,035,893	44.0	213.8	83.1
2002	1,787,544	-12.2	354.9	141.2
2003	2,726,599	52.5	165.8	-189.1
2004	3,401,867	24.8	152.4	-13.4
2005	3,561,261	4.7	130.9	-21.5
2006	3,623,796	1.8	77.6	-53.3
2007	3,305,707	-8.8	101.2	23.6

Other Liability ($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$17,576,768	-0.9%	106.2	NA
2000	18,713,111	6.5	110.5	4.3 pts.
2001	21,415,896	14.4	120.4	9.9
2002	29,342,115	37.0	124.6	4.2
2003	36,149,829	23.2	112.1	-12.5
2004	39,752,695	10.0	114.0	1.9
2005	39,363,336	-1.0	110.3	-3.7
2006	42,221,055	7.3	94.6	-15.7
2007	41,377,084	-2.0	98.9	4.3
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

COMMERCIAL AND FARMOWNERS MULTIPLE PERIL INSURANCE

Commercial multiple peril insurance is a package policy that includes property, boiler and machinery, crime and general liability coverages. Farmowners multiple peril insurance, similar to homeowners insurance, provides coverage to farmowners and ranchowners against a number of named perils and liabilities. It covers a dwelling and its contents, as well as barns, stables and other structures.

COMMERCIAL MULTIPLE PERIL INSURANCE, 1999-2007

Total ($000)

Year	Net premiums written (1)	Annual percent change
1999	$18,983,821	-2.4%
2000	20,072,151	5.7
2001	22,230,355	10.8
2002	25,421,072	14.4
2003	27,430,022	7.9
2004	29,074,586	6.0
2005	29,695,831	2.1
2006	31,850,051	7.3
2007	31,328,917	-1.6

Nonliability Portion ($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$10,293,766	-1.4%	121.7	NA
2000	11,706,119	13.7	114.8	-6.9 pts.
2001	13,010,431	11.1	117.2	2.4
2002	15,251,130	17.2	96.1	-21.1
2003	16,352,256	7.2	88.1	-8.0
2004	16,971,835	3.8	96.7	8.6
2005	17,706,117	4.3	93.8	-2.9
2006	18,246,312	3.1	83.8	-10.0
2007	18,367,516	0.7	89.5	5.7

Liability Portion ($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$8,690,055	-3.6%	113.4	NA
2000	8,366,032	-3.7	115.4	2.0 pts.
2001	9,219,924	10.2	121.3	5.9
2002	10,169,942	10.3	113.9	-7.4
2003	11,077,766	8.9	115.0	1.1
2004	12,102,751	9.3	105.4	-9.5
2005	11,989,714	-0.9	102.7	-2.7
2006	13,603,739	13.5	101.9	-0.8
2007	12,961,401	-4.7	93.2	-8.7
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

FARMOWNERS MULTIPLE PERIL INSURANCE, 1999-2007

($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$1,478,142	2.7%	111.4	NA
2000	1,524,233	3.1	108.9	-2.5 pts.
2001	1,640,592	7.6	113.5	4.6
2002	1,779,336	8.5	106.7	-6.8
2003	2,000,834	12.4	99.1	-7.6
2004	2,118,097	5.9	91.7	-7.5
2005	2,267,698	7.1	94.6	2.9
2006	2,310,688	1.9	122.8	28.1
2007	2,423,989	4.9	97.3	-25.4
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

MEDICAL MALPRACTICE INSURANCE

Medical malpractice insurance covers doctors and other professionals in the medical field for liability claims arising from their treatment of patients.

MEDICAL MALPRACTICE INSURANCE, 1999-2007

($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$5,181,729	3.1%	128.6	NA
2000	5,726,696	10.5	127.9	-0.7 pts.
2001	6,256,399	9.2	150.4	22.5
2002	7,440,970	18.9	138.0	-12.4
2003	8,753,854	17.6	138.8	0.8
2004	9,124,240	4.2	108.6	-30.2
2005	9,734,772	6.7	100.1	-8.6
2006	10,378,325	6.6	89.5	-10.6
2007	9,960,558	-4.0	81.9	-7.6
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

FIRE AND ALLIED LINES INSURANCE

Fire insurance provides coverage against losses caused by fire and lightning. It is usually sold as part of a package policy such as commercial multiple peril.

Allied lines insurance includes property insurance that is usually bought in conjunction with a fire insurance policy. Allied lines includes coverage for wind and water damage and vandalism.

FIRE INSURANCE, 1999-2007

($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$4,773,647	1.4%	104.0	NA
2000	4,740,558	-0.7	110.9	6.9 pts.
2001	5,097,592	7.5	117.5	6.6
2002	7,365,861	44.5	84.0	-33.5
2003	8,396,083	14.0	79.6	-4.4
2004	8,050,779	-4.1	73.1	-6.5
2005	7,937,316	-1.4	83.2	10.1
2006	9,363,902	18.0	77.9	-5.3
2007	9,797,519	4.6	86.0	8.1
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

ALLIED LINES INSURANCE, 1999-2007

($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$2,815,608	-4.8%	123.7	NA
2000	2,933,047	4.2	115.6	-8.1 pts.
2001	3,732,266	27.2	151.1	35.5
2002	4,838,138	29.6	86.3	-64.8
2003	6,154,573	27.2	77.9	-8.3
2004	5,985,422	-2.7	119.8	41.9
2005	5,945,786	-0.7	152.9	33.1
2006	6,592,847	10.9	94.4	-58.5
2007	6,966,059	5.7	53.5	-40.9
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

INLAND MARINE AND OCEAN MARINE INSURANCE

Inland marine insurance covers bridges and tunnels, goods in transit, movable equipment, unusual property, and communications-related structures as well as expensive personal property. Ocean marine insurance provides coverage on all types of vessels, for property damage to the vessels and cargo, as well as associated liabilities.

INLAND MARINE INSURANCE, 1999-2007

($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$6,063,160	2.8%	101.2	NA
2000	6,577,227	8.5	92.0	-9.2 pts.
2001	6,686,003	1.7	98.7	6.7
2002	6,987,446	4.5	85.7	-13.0
2003	7,786,214	11.4	80.1	-5.6
2004	7,940,003	2.0	84.1	4.0
2005	8,251,519	3.9	90.3	6.1
2006	9,216,442	11.7	72.6	-17.7
2007	9,795,551	6.3	79.1	6.5
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

OCEAN MARINE INSURANCE, 1999-2007

($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$1,756,781	-5.5%	115.5	NA
2000	1,738,796	-1.0	102.6	-12.9 pts.
2001	1,979,205	13.8	104.1	1.5
2002	2,442,039	23.4	100.9	-3.2
2003	2,588,607	6.0	103.1	2.2
2004	2,828,685	9.3	95.4	-7.7
2005	2,948,349	4.2	114.5	19.0
2006	3,133,418	6.3	97.3	-17.2
2007	3,261,175	4.1	113.6	16.3
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

SURETY AND FIDELITY

Surety bonds provide monetary compensation in the event that a policyholder fails to perform certain acts such as the proper fulfillment of a construction contract within a stated period. Surety bonds are usually purchased by the party which has contracted to complete a project. They are required for public projects in order to protect taxpayers.

Fidelity bonds, which are usually purchased by an employer, protect against losses caused by employee fraud or dishonesty.

SURETY BONDS, 1999-2007

($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$3,273,926	7.2%	83.6	NA
2000	3,362,627	2.7	86.7	3.1 pts.
2001	3,039,761	-9.6	121.6	34.9
2002	3,260,415	7.3	110.3	-11.3
2003	3,382,615	3.7	119.9	9.6
2004	3,817,245	12.8	119.4	-0.5
2005	3,819,542	0.1	101.6	-17.9
2006	4,434,780	16.1	80.6	-21.0
2007	4,833,956	9.0	71.4	-9.2
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

FIDELITY BONDS, 1999-2007

($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$871,365	11.8%	90.4	NA
2000	815,007	-6.5	93.3	2.9 pts.
2001	842,428	3.4	93.2	-0.1
2002	1,024,107	21.6	104.7	11.6
2003	1,192,535	16.4	70.9	-33.9
2004	1,309,344	9.8	79.7	8.9
2005	1,216,793	-7.1	85.1	5.4
2006	1,240,822	2.0	87.2	2.1
2007	1,252,838	1.0	76.4	-10.8
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

BURGLARY AND THEFT AND BOILER AND MACHINERY INSURANCE

Burglary and theft insurance covers the loss of property, money and securities due to burglary, robbery or larceny.

Boiler and machinery insurance is also known as mechanical breakdown, equipment breakdown or systems breakdown coverage. Among the types of equipment covered by this insurance are heating, cooling, electrical, telephone/communications and computer equipment.

BURGLARY AND THEFT INSURANCE, 1999-2007

($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$111,059	1.4%	82.3	NA
2000	116,885	5.2	60.3	-22.0 pts.
2001	121,629	4.1	71.3	11.0
2002	114,299	-6.0	53.4	-17.9
2003	123,692	8.2	66.8	13.4
2004	138,307	11.8	68.3	1.5
2005	120,136	-13.1	63.5	-4.8
2006	143,054	19.1	64.2	0.6
2007	160,603	12.3	56.3	-7.9
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

BOILER AND MACHINERY INSURANCE, 1999-2007

($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$760,055	1.8%	117.8	NA
2000	1,144,068	50.5	89.9	-27.9 pts.
2001	1,119,295	-2.2	88.2	-1.7
2002	1,410,316	26.0	73.6	-14.6
2003	1,591,987	12.9	68.4	-5.3
2004	1,572,195	-1.2	67.1	-1.3
2005	1,582,917	0.7	60.2	-6.9
2006	1,675,296	5.8	73.1	12.9
2007	1,741,324	3.9	73.1	-0.1
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

CROP INSURANCE

There are two kinds of crop insurance: crop-hail, which covers just hail, fire and wind, and multiple peril crop insurance (MPCI), which provides comprehensive protection against weather-related causes of loss and certain other unavoidable perils. Crop-hail is provided by the private market. MPCI is sold and serviced by the private market but subsidized and reinsured by the federal government under the Federal Crop Insurance Program.

The role of private insurers in the Federal Crop Insurance Program has grown signficantly since 1938, when Congress established the Federal Crop Insurance Corporation (FCIC) to help farmers deal with the effects of the Great Depression and the Dust Bowl. In 2000 Congress enacted legislation enabling private insurers (with FCIC approval) to conduct research and develop new insurance products and features, responsibilities that were previously held only by the FCIC. By 2007 MPCI direct premiums written reached $6.7 billlion, up from nearly $3 billion in 2002, according to Highline Data.

The Midwest floods of June, 2008 are expected to cause signficant MPCI insurance losses, with some estimates reaching $3 billion in Iowa alone.

CROP-HAIL INSURANCE, 1998-2007

Year	Direct premiums written (1) ($000)	Annual percent change	Loss ratio (2)	Annual point change
1998	$576,464	-3.0%	83	26 pts.
1999	508,108	-11.9	76	-7
2000	468,405	-7.8	68	-8
2001	433,743	-7.4	69	1
2002	405,003	-6.6	70	1
2003	422,137	4.2	56	-14
2004	427,567	1.3	58	2
2005	434,711	1.7	44	-14
2006	405,254	-6.8	48	4
2007	489,673	20.8	50	2
(1) Before reinsurance transactions, total for all policyholders of crop-hail insurance. (2) The percentage of each premium dollar spent on claims and associated costs. A drop in the loss ratio represents an improvement; an increase represents a deterioration. See also Glossary. Source: National Crop Insurance Services.

MULTIPLE PERIL CROP INSURANCE, 1999-2007

($000)

Year	Net premiums written (1)	Annual percent change	Combined ratio (2)	Annual point change (3)
1999	$725,821	1.8%	98.2	NA
2000	938,840	29.3	90.4	-7.8 pts.
2001	1,321,820	40.8	96.0	5.6
2002	2,003,443	51.6	124.4	28.4
2003	1,702,862	-15.0	109.8	-14.6
2004	2,203,143	29.4	76.1	-33.8
2005	2,234,630	1.4	91.3	15.2
2006	2,824,769	26.4	77.9	-13.4
2007	3,736,658	32.3	75.3	-2.6
(1) After reinsurance transactions, excluding state funds. (2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration. See also Glossary. (3) Calculated from unrounded data. NA=Data not available. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.

REINSURANCE

Reinsurance is essentially insurance for insurance companies. It is a way for primary insurers to protect against unforeseen or extraordinary losses. Reinsurance also serves to limit liability on specific risks, to increase individual insurers' capacity to write business, and to help insurers stabilize their business in the face of the wide swings in profit and loss margins which are inherent in the insurance business.

REINSURANCE, 1999-2007 (1)

($000)

Year	Net premiums written	Annual percent change	Combined ratio (2)	Annual point change
1999	$21,212,749	9.1%	113.8	9.4 pts.
2000	24,853,859	17.2	114.2	0.4
2001	26,687,636	7.4	142.9	28.7
2002	29,503,920	10.6	121.3	-21.6
2003	30,630,787	3.8	101.2	-20.1
2004	28,759,085	-6.1	106.2	5.0
2005	25,330,697	-11.9	129.4	23.2
2006	25,834,026	2.0	94.9	-34.5
2007	22,711,994	-12.1	94.7	-0.2
(1) Based on reinsurance companies responding to quarterly surveys conducted by the Reinsurance Association of America. (2) After dividends to policyholders. Source: Reinsurance Association of America.