Industry Overview

Industry Overview

INSURANCE INDUSTRY AT A GLANCE

  • The U.S. insurance industry’s net premiums written totaled $1 trillion in 2013, with premiums recorded by life/health (L/H) insurers accounting for 54 percent and premiums by property/casualty (P/C) insurers accounting for 46 percent, according to SNL Financial.
  • P/C insurance consists primarily of auto, home and commercial insurance. Net premiums written for the sector totaled $481.2 billion in 2013.
  • The L/H insurance sector consists primarily of annuities and life insurance. Net premiums written for the sector totaled $560.3 billion in 2013.
  • Health insurance is generally considered separate. The sector includes private health insurance companies as well as government programs. P/C and L/H insurers also write some health insurance.
  • There were 6,086 insurance companies in 2013, including P/C (2,623 companies), life/annuities (904), health (835), fraternal (87), title (58), risk retention groups (256) and other companies (1,323), according to the National Association of Insurance Commissioners.
  • Insurance carriers and related activities accounted for $421.4 billion, or 2.5 percent of U.S. gross domestic product in 2013, according to the U.S. Bureau of Economic Analysis.
  • The U.S. insurance industry employed 2.5 million people in 2014, according to the U.S. Department of Labor. Of those, 1.5 million worked for insurance companies, including life, health and medical insurers (838,200 workers), P/C insurers (596,000 workers) and reinsurers (25,200 workers). The remaining 1 million people worked for insurance agencies, brokers and other insurance-related enterprises.
  • Total P/C cash and invested assets were $1.5 trillion in 2013, according to SNL Financial. L/H cash and invested assets totaled $3.5 trillion in 2013. The majority of these assets were in bonds (63 percent of P/C assets and 75 percent of L/H assets).
  • P/C and L/H insurance companies paid $17.4 billion in premium taxes in 2013, or $55 for every person living in the United States, according to the U.S. Department of Commerce.
  • P/C insurers paid out $12.9 billion in property losses related to catastrophes in 2013, compared with $35.0 billion in 2012, according to ISO. There were 28 catastrophes in 2013, compared with 26 in 2012.

 

U.S. PROPERTY/CASUALTY AND LIFE/HEALTH INSURANCE PREMIUMS, 2014 (1)

(1) Property/casualty: net premiums written after reinsurance transactions, excludes state funds; life/health: premiums, annuity considerations (fees for annuity contracts) and deposit-type funds.

Source: SNL Financial LC.

View Archived Graphs

 

 

EMPLOYMENT IN INSURANCE, 2005-2014

(Annual averages, 000)

  Insurance carriers Insurance agencies, brokerages and related services  
  Direct insurers (1)            
Year Life, health
and medical
Property/
casualty
Reinsurers Total Insurance
agencies
and brokers
Other
insurance-
related
activities (2)
Total Total
industry
2005 764.9 652.1 28.8 1,445.7 652.5 240.7 893.2 2,338.9
2006 790.6 649.1 28.0 1,467.7 662.4 249.0 911.4 2,379.1
2007 787.1 647.0 27.0 1,461.1 677.8 252.7 930.5 2,391.6
2008 800.8 646.7 27.9 1,475.4 671.6 258.1 929.6 2,405.1
2009 802.8 632.9 27.5 1,463.2 653.3 254.2 907.4 2,370.6
2010 804.1 614.3 26.8 1,445.2 642.3 253.1 895.5 2,340.6
2011 788.9 611.6 25.6 1,426.1 649.2 261.1 910.3 2,336.4
2012 811.3 599.5 25.7 1,436.4 659.6 272.3 931.8 2,368.3
2013 813.2 593.7 26.2 1,433.1 672.3 283.5 955.8 2,388.9
2014 838.2 596.0 25.2 1,459.3 711.7 295.9 1,007.6 2,467.0

(1) Establishments primarily engaged in initially underwriting insurance policies.
(2) 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.

View Archived Tables

 

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, 2010-2014 (1)

($ billions)

  2010 2011 2012 2013 2014
Net written premiums $423.8 $438.0 $456.7 $477.0 $496.6
     Percent change 1.3% 3.4% 4.3% 4.4% 4.1%
Earned premiums $422.2 $434.4 $448.9 $467.4 $487.6
Losses incurred 257.7 290.8 277.7 259.4 277.4
Loss adjustment expenses incurred 52.9 53.8 55.5 55.6 57.3
Other underwriting expenses 119.8 124.2 128.9 134.6 138.1
Policyholder dividends 2.3 1.9 2.1 2.5 2.5
Net underwriting gain/loss -10.5 -36.2 -15.4 15.2 12.3
Net investment income 47.6 49.2 48.0 47.3 46.2
Miscellaneous income/loss 1.1 2.5 2.4 1.5 -2.8
Operating income 38.2 15.4 35.0 64.1 55.6
Realized capital gains 5.9 7.0 6.2 11.4 10.1
Federal and foreign income tax 8.8 3.0 6.1 12.0 10.2
Net income after taxes 35.2 19.5 35.1 63.4 55.5

(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 company.

View Archived Tables

 

 

TOP 10 WRITERS OF PROPERTY/CASUALTY INSURANCE BY DIRECT PREMIUMS WRITTEN, 2014

($000)

Rank Group/company Direct premiums written (1) Market share (2)
1 State Farm Mutual Automobile Insurance $58,508,587 10.3%
2 Liberty Mutual 29,364,559 5.1
3 Allstate Corp. 28,892,088 5.1
4 Berkshire Hathaway Inc. 26,555,515 4.7
5 Travelers Companies Inc. 22,790,776 4.0
6 Progressive Corp. 20,056,860 3.5
7 Nationwide Mutual Group 18,935,862 3.3
8 American International Group 18,653,981 3.3
9 Farmers Insurance Group of Companies (3) 18,611,695 3.3
10 USAA Insurance Group 15,678,176 2.8

(1) Before reinsurance transactions, includes state funds.
(2) Based on U.S. total, includes territories.
(3) Data for Farmers Insurance Group of Companies and Zurich Financial Group (which owns Farmers' management company) are reported separately by SNL Financial.

Source: SNL Financial LC.

View Archived Tables

 

 

TOP 10 WRITERS OF LIFE INSURANCE/ANNUITIES BY DIRECT PREMIUMS WRITTEN, 2014

($000)

Rank Group/company Direct premiums written (1) Market share (2)
1 MetLife Inc. $95,331,132 16.1%
2 Prudential Financial Inc. 44,720,129 7.6
3 New York Life Insurance Group 28,393,849 4.8
4 Jackson National Life Group 26,708,218 4.5
5 AEGON 25,339,180 4.3
6 Lincoln National Corp. 24,329,107 4.1
7 American International Group 23,279,901 3.9
8 Principal Financial Group Inc. 18,894,839 3.2
9 Manulife Financial Corp. 18,513,758 3.1
10 Massachusetts Mutual Life Insurance Co. 16,818,431 2.8

(1) Before reinsurance transactions. Includes life insurance, annuity considerations, deposit-type contract funds and other considerations; excludes accident and health insurance.
(2) Based on U.S. total, includes territories.

Source: SNL Financial LC.

View Archived Tables

 

 

LIFE/HEALTH INSURANCE INDUSTRY INCOME STATEMENT, 2010-2014

($ billions, end of year)

  2010 2011 2012 2013 2014 Percent change,
2013-2014 (1)
Revenue            
Life insurance premiums $100.3 $122.8 $130.5 $126.1 $133.8 6.2%
Annuity premiums and deposits 286.3 327.0 339.9 279.4 352.8 26.3
Accident and health premiums 150.8 151.1 151.4 153.3 156.6 2.2
Credit life and credit accident and health premiums 1.6 1.6 1.6 1.4 1.4 -3.9
Other premiums and considerations 23.1 2.1 2.2 2.3 2.6 8.9
Total premiums, consideration and deposits $562.1 $604.5 $625.7 $562.6 $647.3 15.1%
Net investment income 164.1 167.3 166.5 168.0 171.7 2.3
Reinsurance allowance -29.3 -16.3 -30.8 -21.2 -15.0 -29.5
Separate accounts revenue 23.4 26.1 29.5 31.4 34.3 9.1
Other income 53.0 53.3 41.5 43.0 39.5 -8.0
Total revenue $773.3 $835.0 $832.5 $783.7 $877.9 12.0%
Expense            
Benefits 231.6 239.0 241.8 250.8 251.8 0.4
Surrenders 216.8 237.3 245.7 248.7 281.5 13.2
Increase in reserves 96.2 141.2 83.8 86.2 108.7 26.1
Transfers to separate accounts 29.3 32.4 61.6 -0.8 -16.5 (2)
Commissions 48.9 51.4 52.6 53.0 52.1 -1.8
General and administrative expenses 54.7 56.4 57.2 58.5 59.0 0.8
Insurance taxes, licenses and fees 7.5 7.8 8.0 8.2 10.0 21.7
Other expenses 2.2 8.1 6.7 -0.4 65.8 (2)
Total expenses $687.2 $773.6 $757.4 $704.3 $812.4 15.4%
Net income            
Policyholder dividends 15.0 15.1 15.2 15.7 16.4 4.9
Net gain from operations before federal income tax 53.1 28.0 59.6 63.8 49.0 -23.1
Federal income tax 8.6 4.7 9.9 8.6 10.1 18.2
Net income before capital gains $44.1 $22.9 $49.7 $55.2 $38.9 -29.5%
Net realized capital gains (losses) -16.0 -8.5 -9.4 -12.0 -1.3 -89.1
Net income $28.0 $14.4 $40.3 $43.2 $37.6 -12.9%
Pre-tax operating income 53.1 28.0 59.6 63.8 49.0 -23.1

(1) Calculated from unrounded data.
(2) Not applicable.

Source: SNL Financial LC.

View Archived Tables