For U.S. property/casualty mutual insurers, growth in the small commercial market is outpacing personal lines growth, a trend driven by carriers’ desire to remain competitive, A.M. Best said in a new report.

Net premiums written for mutual insurer commercial lines grew by 28 percent since 2011, versus 15 percent for personal lines, according to the A.M. Best report “Mutual/Property/Casualty Insurers Managing Market Challenges.” As of 2015, personal lines counts for 66 percent of total net premiums written. While that is a majority, the number has dipped from 68 percent five years previously, thanks to rapid commercial lines underwriting growth, according to the A.M. Best report.

“Gradual shifting away from personal lines goes hand in hand with the product line diversification that has been demonstrated by the rated mutual companies,” A.M. Best said.

Mutuals that have done this have produced solid results, A.M. Best said, leading to a 103.5 combined ratio in 2015., and a loss ratio of 58.6, data that remains static from 2014 but also a better operating performance compared to previous years going back to 2011.

Still, the data reflects a higher underwriting expense ratio and that has led to some compression of underwriting. But steady loss ratios and net investment income has helped boost profitability. What’s more, diversification has helped reduce concentration risk, A.M. Best said.

Overall, the U.S. property/casualty mutual insurance sector grew 3.1 percent in 2015, and has grown a compound average rate of 3.4 percent since 2010, the ratings agency said.

Another stabilizing factor involves the reality that the 10 largest mutual insurers in this population handled more than 70 percent of net premiums written in 2015. According to the report, State Farm Group continues to dominate with 41 percent of the market, and Nationwide has 13 percent.

Source: A.M. Best