Stakeholder Team Accomplishment Recognition^™ (STAR)

Purpose of the Award

Although there are numerous insurance industry awards and recognitions based on corporate achievement, they focus on a single aspect of success, such as top-line revenue growth or profitability.  Demotech believes that operating a successful and profitable insurance company involves the satisfaction of all stakeholders: i.e., regulators, consumers, producers, employees, reinsurers, claimants, and ultimately, owners.

Demotech understands that each of these stakeholders participates in or contributes to the financial results reported by an insurance company.  In 2013, Demotech created the Stakeholder Team Accomplishment Recognition^TM (STAR) Award to recognize Property & Casualty companies that were able to satisfy all stakeholders by meeting or exceeding our objective criteria for each stakeholder category. Since the award’s inception, 125 insurance companies reporting to the NAIC have won the award at least once.

The award criteria are as follows:

Preliminary Eligibility Criteria

• The Company was active as of March 31, current year.
• The Company was assigned a Demotech Company Classification.
• The Company had positive surplus as regards policyholders as of latest year-end.
• The Company had positive net loss and LAE reserves as of latest year-end.
• The Company had positive gross premium written as of latest year-end.

Regulatory and Consumer Stakeholder Criteria

• The Company had a Risk Based Capital ratio greater than 300 percent in all of the past five years.
• The Company had two or fewer exceptional IRIS ratio results for the previous year.
• The Company’s IRIS ratios 11, 12, and 13 did not exceed five percent in any of the past five years.

 Producer and Employee Stakeholder Criteria

• The Company’s ratio of commissions and compensation to employees to gross premium written was above the median for its Company Classification.

Reinsurer Stakeholder Criteria

• The Company’s ceded loss and LAE ratio for the last ten accident years (combined) did not exceed 130% of the net loss and LAE ratio for the last ten accident years (combined), as shown on Schedule P, Part 1 Summary.

Claimant Stakeholder Criteria

• The Company’s gross loss and LAE ratio for the latest accident year, as shown on Schedule P, Part 1 Summary, was above the median for its Company Classification.

Owner Stakeholder Criteria

• The Company’s return on average net admitted assets was in the top third of its Company Classification.

Using the Demotech Company Classification System

Demotech classifies insurance companies into one of eleven different categories based on objective financial criteria.  When examining the recipients of the STAR Awards, it is important to note that almost all of these eleven categories have been represented each year, affirming the assumption that stakeholder satisfaction is independent of size or corporate structure.

For information on the Stakeholder Team Accomplishment Recognition^™ or media inquiries, please contact Rachel Wilkins at rwilkins@demotech.com.