The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Audit Analytics’ insurance database includes normalized financial, auditor, and demographical information from over 4,300 NAIC Insurers since 2010. Key data points include assets, revenue, and auditor of record.
Unless a company has received an exemption from filing an audited financial statement, doing so is required. Only a small number of companies received such an exemption in 2015, under 200 total. While not every company disclosed the reason behind the need for an exemption, a few examples which were disclosed included: audit waived, not applicable, no policies were issued or premiums written in 2015, small company exemption, and organizational hardship exemption.
During 2015, there were 4,238 NAIC registered companies. For those companies, the Big 4 had the largest audit market share. PwC and E&Y lead with 680 and 646 audits, respectively. Johnson Lambert LLP audited 134 companies, leading the way for non-Big 4 firms.
A large portion of the NAIC insurance companies are part of a larger group of insurance companies which typically helps the group offset liabilities, and over exposure. During 2015, there were 613 NAIC registered groups. Insurance groups can have several auditors named due to the fact that individual companies that comprise a particular group can have a different auditor.
Ernst & Young had a hand in each of 118 insurance groups, followed closely by PwC and KPMG. BDO USA, with 33 groups audited, was the leader outside of the Big 4 firms.
Finally, when looking at market share by business line, the Big 4 rank in the top 5 auditors for 3 out of 6 business lines. More than half of all NAIC filers, or 2,592 companies, classified themselves under Property & Casualty insurance. Of these companies, PwC lead with 429 audits.
Stay tuned for our follow up blog covering the 2015 related accounting and audit, and legal fees.
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