When viewed in terms of industry totals, the larger companies showed a greater increase in general expenses, although they also posted larger gains in top-line growth. This helps explain the lower ratio of general expenses to net premiums written for the top 200 in 1998, indicating that these companies are benefiting from economies of scale. This benefit may be greater for stock companies based on results within the multiline group. Nevertheless, mutual companies have been able to expand distribution through mergers. New England Life Insurance Co. In addition, the most successful companies have stayed focused on core competencies and the needs of a target market.
Net premium is one of several ways to measure top-line growth.
It also includes annuity deposits. New business growth, however, is more difficult to measure, particularly as the industry has merged, acquired and divested whole companies and blocks of business. In addition, as the stock market soared, net premium growth has been driven, to a large extent, by deposits into variable life and annuity accounts, and this includes deposits into existing accounts. This distorts the picture of real growth. Net operating gain is also a number that can fluctuate dramatically in connection with mergers, acquisitions and other restructurings, distorting the picture of true underlying performance.