Tuesday, 10 March 2020

Insurance institute


Facts + Statistics: Industry overview

 
Insurance industry at-a-glance

  • U.S. insurance industry net premiums written totaled $1.22 trillion in 2018, with premiums recorded by property/casualty (P/C) insurers accounting for 51 percent, and premiums by life/annuity insurers accounting for 49 percent, according to S&P Global Market Intelligence.
  • P/C insurance consists primarily of auto, homeowners and commercial insurance. Net premiums written for the sector totaled $618.0 billion in 2018.
  • The life/annuity insurance sector consists of annuities, accident and health, and life insurance. Net premiums written for the sector totaled $600.6 billion in 2018.
  • Although most private health insurance is written by companies that specialize in that line of business, life and P/C insurers also write coverage referred to as accident and health insurance. Total private health insurance direct premiums written were $919.6 billion in 2018, including: $715.6 billion from the health insurance sector; $197.5 billion from the life/annuity sector; and $6.5 billion from the P/C sector, according to S&P Global Market Intelligence. The health insurance sector also includes government programs.
  • In 2018 there were 5,965 insurance companies in the U.S. (including territories). According to the National Association of Insurance Commissioners, those were comprised of the following: P/C (2,507); life/annuity (841); health (931); fraternal (82); title (60); risk retention groups (239) and other companies (1,305).
  • Insurance carriers and related activities contributed $564.5 billion, or 2.8 percent, to the nation’s gross domestic product (GDP) in 2018, according to the U.S. Bureau of Economic Analysis.
  • Total P/C cash and invested assets were $1.7 trillion in 2018, according to S&P Global Market Intelligence. Life insurance and annuity cash and invested assets totaled $4.1 trillion in 2018; separate accounts assets and other investments totaled $2.5 trillion. The total of cash and invested assets for both sectors was $8.3 trillion. Most of these assets were in bonds (60 percent of P/C assets and 72 percent of life/annuity assets, excluding separate accounts).
  • P/C and life/annuity insurance companies paid $22.5 billion in premium taxes in 2018, or $69 for every person living in the United States, according to the U.S. Department of Commerce.
  • P/C insurers paid out $49.5 billion in property losses related to catastrophes in 2018, according to the Property Claim Services (PCS) division of Verisk Analytics, down from $105.7 billion in 2017, which was the highest loss since PCS began collecting insured loss data in 1949. There were 55 catastrophes in 2018, compared with 46 in 2017.
  • The U.S. insurance industry employed 2.7 million people in 2018, according to the U.S. Department of Labor. Of those, 1.5 million worked for insurance companies, including life and health insurers (870,600 workers), P/C insurers (621,800 workers) and reinsurers (29,100 workers). The remaining 1.2 million people worked for insurance agencies, brokers and other insurance-related enterprises.

 
Property/Casualty And Life/Annuity Insurance Premiums, 2018 (1)

(US$ billions)
(1) Property/casualty: net premiums written after reinsurance transactions, excludes state funds; life/annuity: premiums, annuity considerations (fees for annuity contracts) and deposit-type funds. Both sectors include accident and health insurance.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

 
Employment In Insurance, 2009-2018

(Annual averages, 000)
 Insurance carriersInsurance agencies, brokerages and related services 
 Direct insurers (1)      
YearLife and
health (2)
Property/
casualty
ReinsurersTotalInsurance
agencies
and brokers
Other
insurance-
related
activities (3)
TotalTotal
industry
2009802.8632.927.51,463.2653.3254.2907.42,370.6
2010804.1614.326.81,445.2642.3253.1895.52,340.6
2011788.9611.625.61,426.1649.2261.1910.32,336.4
2012811.3599.525.71,436.5659.6272.3931.82,368.3
2013813.2593.726.21,433.1672.3283.5955.82,388.9
2014829.0594.725.11,448.8720.0297.11,017.12,465.8
2015829.8611.625.11,466.5762.8309.11,071.82,538.3
2016818.9643.525.31,487.7783.5321.51,105.02,592.7
2017850.4639.726.61,516.7809.6333.31,142.92,659.6
2018870.6621.829.11,521.5825.2343.71,168.92,690.4
(1) Establishments primarily engaged in initially underwriting insurance policies.
(2) Includes establishments engaged in underwriting annuities, life insurance and health and medical insurance policies.
(3) Includes claims adjusters, third-party administrators of insurance funds and other service personnel such as advisory and insurance ratemaking services.
Source: U.S. Department of Labor, Bureau of Labor Statistics.
A property/casualty insurer must maintain a certain level of surplus to underwrite risks. This financial cushion is known as “capacity.” When the industry is hit by high losses, such as a major hurricane, capacity is diminished. It can be restored by increases in net income, favorable investment returns, reinsuring more risk, and/or raising additional capital.

 
Property/Casualty Insurance Industry Income Analysis, 2014-2018 (1)

($ billions)
 20142015201620172018
Net premiums written $497.0$514.4$528.3$552.6$612.6
     Percent change4.2%3.5%2.7%4.6%10.8%
Premiums earned $487.9$506.0$523.5$540.6$594.1
Losses incurred277.7290.7317.9347.6360.9
Loss adjustment expenses incurred57.359.660.362.763.3
Other underwriting expenses138.3144.3147.6151.0167.0
Policyholder dividends2.42.52.32.63.0
Net underwriting gain/loss12.28.9-4.7-23.3-0.1
Net investment income46.447.246.648.955.3
Miscellaneous income/loss-2.71.51.1-5.21.4
Operating income55.957.743.020.356.6
Realized capital gain10.39.47.315.110.4
Federal and foreign income tax10.310.27.4-0.67.0
Net income after taxes55.956.842.936.160.0
(1) Data in this chart exclude state funds and other residual market insurers and may not agree with similar data shown elsewhere from different sources.
Source: ISO®, a Verisk Analytics® business.

 
Top 10 Writers Of Property/Casualty Insurance By Direct Premiums Written, 2018

($000)
RankGroup/companyDirect premiums written (1)Market share (2)
1State Farm Mutual Automobile Insurance$65,861,6179.7%
2Berkshire Hathaway Inc.43,869,8096.5
3Liberty Mutual34,605,0815.1
4Progressive Corp.33,754,9235.0
5Allstate Corp.33,251,1764.9
6Travelers Companies Inc.26,244,1723.9
7Chubb Ltd.22,125,3383.3
8USAA Insurance Group21,984,9703.2
9Farmers Insurance Group of Companies 20,309,9743.0
10Nationwide Mutual Group18,416,8612.7
(1) Before reinsurance transactions, includes state funds and accident and health insurance.
(2) Based on U.S. total, includes territories.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

 
Top 10 Writers Of Life/Annuity Insurance By Direct Premiums Written, 2018

($000)
RankGroup/companyDirect premiums written (1)Market share (2)
1MetLife Inc. $96,451,60714.1%
2Prudential Financial Inc. 53,148,5507.8
3New York Life Insurance Group 35,452,2115.2
4Massachusetts Mutual Life Insurance Co. 27,154,6114.0
5American International Group (AIG)26,446,9343.9
6Lincoln National Corp. 25,804,5653.8
7Principal Financial Group Inc. 25,322,7743.7
8AXA 22,579,4313.3
9Transamerica22,352,4183.3
10Jackson National Life Group 21,511,5573.2
(1) Includes life insurance, annuity considerations, deposit-type contract funds and other considerations, and accident and health insurance. Before reinsurance transactions.
(2) Based on U.S. total, includes territories.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

 
Life/Annuity Insurance Income Statement, 2014-2018

($ billions, end of year)
 20142015201620172018Percent change,
2017-2018 (1)
Revenue      
     Life insurance premiums$133.9$151.4$115.0$137.1$145.46.0%
     Annuity premiums and deposits352.8324.0318.5287.2269.7-6.1
     Accident and health premiums156.6158.8162.8169.3184.28.8
     Credit life and credit accident and health  premiums1.41.41.31.31.34.1
     Other premiums and considerations2.62.52.22.14.090.1
     Total premiums, consideration and deposits$647.3$638.2$599.9$597.1$604.61.3%
     Net investment income171.7170.8173.0182.3187.42.8
     Reinsurance allowance-15.0-86.4-17.0-25.132.0NA
     Separate accounts revenue34.335.234.736.637.32.0
     Other income39.790.561.349.044.0-10.2
     Total revenue$878.0$848.2$851.9$839.8$905.47.8%
Expense      
     Benefits251.8263.9271.4281.4290.73.3
     Surrenders281.5273.0265.1308.9350.313.4
     Increase in reserves108.780.5133.1106.4143.434.8
     Transfers to separate accounts-16.536.9-38.0-65.8-89.6NA
     Commissions52.155.564.658.058.40.6
     General and administrative expenses59.060.162.465.966.00.1
     Insurance taxes, licenses and fees10.010.510.88.810.822.0
     Other expenses66.0-4.9-2.7-4.311.3NA
     Total expenses$812.5$775.5$766.6$759.3$841.110.8%
Net income      
     Policyholder dividends16.418.318.217.518.24.0
     Net gain from operations before federal income tax49.054.467.163.046.0-26.9
     Federal income tax10.110.616.312.43.4-72.3
     Net income before capital gains$38.9$43.8$50.8$50.6$42.6-15.8%
     Net realized capital gains (losses)-1.3-3.5-11.4-8.6-4.7NA
     Net income$37.6$40.3$39.4$42.1$37.9-10.0%
     Pre-tax operating income49.054.467.163.046.0-26.9
     Capital and surplus, end of year354.0367.2380.7394.9400.01.3
(1) Calculated from unrounded data.
NA=Not applicable.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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