Press Releases

December 21, 2010

Ward Group Releases Findings from Analysis of Independent Auditors for Insurance Companies

CINCINNATI - Ward Group, the leading provider of benchmarking and best practices research studies to the insurance industry, released its findings from a benchmarking analysis of the independent certified public accountant or accounting firm retained by insurance companies to conduct their annual audit.

One of the key relationships for most insurance companies is their relationship with the independent accounting firm or individual who performs the audit on the financial statements. Beyond just fulfilling required audits for the company, these firms act as advisers on a diverse range of financial matters. The purpose of this research was to help insurance companies identify auditors most commonly used within the industry.

The analysis was developed using insurance company responses to the general interrogatories in the 2009 year-end statutory filings. Over 3,360 property-casualty and life-health insurers were examined. The study identified several key points:

• Approximately 61% of the insurance companies used one of the “Big 4” accounting firms as their auditor (PricewaterhouseCoopers, Ernst & Young, Deloitte and KPMG), representing 96% of total net premium of the companies analyzed.

• Larger insurance companies were more likely to use a Big 4 accounting firm as their auditor. The analysis showed 94% of insurance companies with revenues over $250 million used one of the Big 4 accounting firms to conduct their annual audit.

• Nearly 43% of insurance companies with revenues less than $250 million used an auditor other than one of the Big 4 accounting firms.

• Property-casualty companies were more likely to use a smaller accounting firm to conduct the audit than life-health companies. Approximately 41% of property-casualty companies used an accounting firm other than a Big 4 auditing firm compared to 31% of life-health companies.

The following lists the 20 largest auditors identified ranked by the number of insurance clients and lists the ranking of each firm by the percent of premium represented by its clients.