International
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PREMIUMS
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WORLD LIFE AND NONLIFE INSURANCE IN 2006
Outside the United States, the insurance industry is divided into life and nonlife or general insurance rather than life/health and property/casualty.
In 2007 world insurance premium volume, for both sectors combined, totaled $4.06 trillion, up 10.5 percent from $3.67 trillion in 2006, according to Swiss Re. On an inflation-adjusted basis, total insurance premiums grew fastest in Latin America and the Caribbean, up 9.6 percent, followed by Asia, up 4.5 percent, Oceania (Australia, New Zealand and other islands), up 3.9 percent, Europe, up 3.4 percent, Africa, up 2.8 percent and North America, also up 2.1 percent. Inflation-adjusted premiums grew 11.8 percent in emerging markets and 2.5 percent in industrialized countries.
In 2007 life and nonlife insurance premiums (excluding cross-border business) accounted for 15.7 percent of gross domestic product (GDP) in both Taiwan and the United Kingdom, the highest share in the Swiss Re study, followed by 15.3 percent in the South Africa. Premiums represented 8.9 percent of GDP in the United States.
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TOP TEN COUNTRIES BY NONLIFE AND LIFE DIRECT PREMIUMS WRITTEN, 2007 (1)
(Direct premiums written, U.S. $ millions)
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Total premiums |
Rank |
Country |
Nonlife premiums (2) |
Life premiums |
Amount |
Percent change from prior year |
Percent of total world premiums |
| 1 | United States (3) | $651,311 | $578,357 | $1,229,668 | 4.69% | 30.28% |
| 2 | United Kingdom | 113,946 | 349,740 | 463,686 | 28.16 | 11.42 |
| 3 | Japan (4) | 94,182 | 330,651 | 424,832 | -3.31 | 10.46 |
| 4 | France | 81,907 | 186,993 | 268,900 | 7.47 | 6.62 |
| 5 | Germany | 120,407 | 102,419 | 222,825 | 10.09 | 5.49 |
| 6 | Italy | 54,112 | 88,215 | 142,328 | 1.27 | 3.50 |
| 7 | South Korea (4) | 35,692 | 81,298 | 116,990 | 16.28 | 2.88 |
| 8 | Netherlands | 66,834 | 35,998 | 102,831 | 11.98 | 2.53 |
| 9 | Canada (5) | 54,805 | 45,593 | 100,398 | 14.74 | 2.47 |
| 10 | PR China | 33,810 | 58,677 | 92,487 | 30.75 | 2.28 |
(1) Before reinsurance transactions.
(2) Includes accident and health insurance.
(3) Nonlife premiums include state funds; life premiums include an estimate of group pension business.
(4) April 1, 2007-March 31, 2008.
(5) Life business expressed in net premiums.
Source: Swiss Re, sigma, No. 3/2008. |
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Swiss Re’s 2007 world insurance study is based on direct premium data from 147 countries, including 88 countries with premium volume of at least $407 million in 2007. Study findings indicate that premiums increased by 3.3 percent in 2007, adjusted for inflation. Life insurance premiums increased by 5.4 percent, accelerating in the industrialized economies except for Japan and continental Europe. Sales of retirement and other wealth accumulation products spurred growth in industrialized nations while strong economic performance fueled life growth in the emerging markets. Nonlife premiums grew 0.7 percent, declining slightly in industrialized nations but up 10.2 percent in emerging countries.
In the United States, the world’s largest life insurance market, growth in the life sector resulted from robust sales of savings protection products and annuities due to an increased focus on retirement and estate planning. U.S. nonlife premiums fell 1.3 percent with declines in all lines but property and marine. For 2008, Swiss Re expects global growth in life premium to moderate as capital and stock market turmoil dampen demand. Nonlife premiums will stay flat and combined ratios are expected to continue to deteriorate due to pressures on rates and sluggish premium growth. Of note, the subprime crisis is expected to have some negative implications but not on the scale of the banking industry as insurers have only minor exposure to mortgage-related assets. Only specialized lines of business are likely to be affected.
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WORLD LIFE AND NONLIFE INSURANCE PREMIUMS, 2007
Source: Swiss Re, sigma, No. 3/2008.
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WORLD LIFE AND NONLIFE INSURANCE PREMIUMS, 2005-2007 (1)
(Direct premiums written, U.S. $ millions)
Year |
Nonlife (2) |
Life |
Total |
| 2005 | $1,442,258 | $2,003,557 | $3,445,816 |
| 2006 | 1,549,100 | 2,125,791 | 3,674,892 |
| 2007 | 1,667,780 | 2,393,089 | 4,060,870 |
(1) Before reinsurance transactions.
(2) Includes accident and health insurance.
Source: Swiss Re, sigma database. |
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REINSURANCE
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Each year the Reinsurance Association of America (RAA) provides an overview of the countries from which U.S. insurance companies obtain reinsurance, i.e., the countries to which they have ceded, or transferred, some of their risk. The analysis includes premiums that a U.S. insurance company cedes to “alien,” i.e., foreign, reinsurance companies that are not part of the insurer’s own corporate group (“unaffiliated alien reinsurers” in the chart below), as well as business ceded to overseas reinsurers that are part of the insurer’s corporate family (“affiliated alien reinsurers” in the chart below).
According to the RAA, the role of foreign reinsurers in the U.S. market is growing. Unaffiliated alien reinsurers’ share of the U.S. market increased from 51.8 percent in 2005 to 53.1 percent in 2006. If the domicile of the ultimate parent of the reinsurance company is taken into account, foreign (or foreign owned) reinsurance companies accounted for 84.5 percent of the market in 2006, down from 85.4 percent in 2005.
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U.S. REINSURANCE PREMIUMS CEDED TO UNAFFILIATED AND AFFILIATED
ALIEN REINSURERS BY COUNTRY, 2004-2006 (1)
($ millions)
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Unaffiliated alien reinsurers |
Affiliated alien reinsurers |
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Rank |
Country |
2004 |
2005 |
2006 |
2004 |
2005 |
2006 |
2006 total |
| 1 | Bermuda | $7,795 | $8,908 | $8,982 | $17,031 | $18,590 | $18,474 | $27,456 |
| 2 | Switzerland | 1,533 | 950 | 797 | 7,795 | 7,664 | 7,991 | 8,788 |
| 3 | U.K. | 4,144 | 4,827 | 4,630 | 300 | 252 | 346 | 4,976 |
| 4 | Germany | 2,869 | 2,529 | 2,582 | 3,294 | 9,401 | 2,005 | 4,587 |
| 5 | Cayman Islands | 1,618 | 1,780 | 1,806 | 629 | 646 | 435 | 2,241 |
| 6 | Barbados | 841 | 837 | 652 | 925 | 917 | 965 | 1,617 |
| 7 | Ireland | 852 | 788 | 532 | 177 | 165 | 451 | 983 |
| 8 | France | 401 | 600 | 352 | 198 | 293 | 338 | 690 |
| 9 | Sweden | NA | NA | NA | 38 | 50 | 518 | 518 |
| 10 | Turks and Caicos | 447 | 382 | 398 | NA | NA | NA | 398 |
| 11 | British Virgin Islands | NA | NA | NA | 49 | 72 | 327 | 327 |
| 12 | Japan | 285 | 273 | 261 | NA | NA | NA | 261 |
| | Total, countries shown | 20,785 | 21,874 | 20,992 | 30,436 | 38,090 | 31,850 | 52,842 |
| | Total | $21,961 | $23,246 | $22,214 | $31,140 | $38,816 | $32,470 | $54,684 |
(1) Ranked by 2006 total reinsurance premiums.
NA=Data not available.
Source: Reinsurance Association of America. |
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LEADING COMPANIES
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THE WORLD'S LEADING INSURANCE COMPANIES
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TOP TEN GLOBAL INSURANCE COMPANIES
BY REVENUES, 2006 (1)
($ millions)
Rank |
Company |
Revenues (2) |
Country |
Industry |
| 1 | ING Group | $158,274 | Netherlands | Life/health |
| 2 | AXA | 139,738 | France | Life/health |
| 3 | Allianz | 125,346 | Germany | Property/casualty |
| 4 | American International Group | 113,194 | U.S. | Property/casualty |
| 5 | Assicurazioni Generali | 101,811 | Italy | Life/health |
| 6 | Berkshire Hathaway | 98,539 | U.S. | Property/casualty |
| 7 | Aviva | 83,487 | U.K. | Life/health |
| 8 | Prudential | 66,134 | U.K. | Life/health |
| 9 | Zurich Financial Services | 65,000 | Switzerland | Property/casualty |
| 10 | State Farm Insurance Cos. | 60,528 | U.S. | Property/casualty |
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
Source: Fortune. |
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TOP TEN GLOBAL PROPERTY/CASUALTY INSURANCE COMPANIES
BY REVENUES, 2006 (1)
($ millions)
Rank |
Company |
Revenues (2) |
Country |
| 1 | Allianz | $125,346 | Germany |
| 2 | American International Group | 113,194 | U.S. |
| 3 | Berkshire Hathaway | 98,539 | U.S. |
| 4 | Zurich Financial Services | 65,000 | Switzerland |
| 5 | State Farm Insurance Cos. | 60,528 | U.S. |
| 6 | Munich Re Group | 58,183 | Germany |
| 7 | Millea Holdings | 36,067 | Japan |
| 8 | Allstate | 35,796 | U.S. |
| 9 | Swiss Reinsurance | 32,118 | Switzerland |
| 10 | Hartford Financial Services | 26,500 | U.S. |
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
Source: Fortune. |
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TOP TEN GLOBAL LIFE/HEALTH INSURANCE COMPANIES
BY REVENUES, 2006 (1)
($ millions)
Rank |
Company |
Revenues (2) |
Country |
| 1 | ING Group | $158,274 | Netherlands |
| 2 | AXA | 139,738 | France |
| 3 | Assicurazioni Generali | 101,811 | Italy |
| 4 | Aviva | 83,487 | U.K. |
| 5 | Prudential | 66,134 | U.K. |
| 6 | Nippon Life Insurance | 56,624 | Japan |
| 7 | CNP Assurances | 55,584 | France |
| 8 | MetLife | 53,275 | U.S. |
| 9 | Aegon | 45,939 | Netherlands |
| 10 | Dai-ichi Mutual Life Insurance | 40,146 | Japan |
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
Source: Fortune. |
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TOP TEN GLOBAL REINSURERS
BY NET REINSURANCE PREMIUMS WRITTEN, 2006
($ millions)
Rank |
Company |
Net reinsurance premiums written |
Country |
| 1 | Munich Re | $25,432.7 | Germany |
| 2 | Swiss Re (1) | 23,841.1 | Switzerland |
| 3 | Berkshire Hathaway Re | 11,576.0 | U.S. |
| 4 | Hannover Re | 9,353.5 | Germany |
| 5 | Lloyd's | 8,445.3 | U.K. |
| 6 | SCOR (2) | 4,885.2 | France |
| 7 | Reinsurance Group of America Inc. | 4,343.0 | U.S. |
| 8 | Everest Re | 3,875.7 | Bermuda |
| 9 | PartnerRe | 3,689.5 | Bermuda |
| 10 | Transatlantic Holdings Inc. | 3,633.4 | U.S. |
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(1) Does not reflect full year premiums for GE Insurance Solutions Corp., acquired June 2006.
(2) Based on a pro forma consolidation of SCOR and Revios, acquired in 2006.
Source: Standard & Poors. |
| - In 2007 global reinsurance premium written totaled $168.0 billion, up 9.8 percent from $153.1 billion in 2006, according to Standard & Poor’s.
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TOP TEN GLOBAL INSURANCE BROKERS BY REVENUES, 2006
($ millions)
Rank |
Company |
Brokerage revenues (1) |
Country |
| 1 | Marsh & McLennan Cos. Inc. | $10,474.0 | U.S. |
| 2 | Aon Corp. | 6,709.0 | U.S. |
| 3 | Willis Group Holdings Ltd. | 2,341.0 | U.K. |
| 4 | Arthur J. Gallagher & Co. | 1,437.8 | U.S. |
| 5 | Wells Fargo Insurance Services Inc. | 1,008.7 | U.S. |
| 6 | Brown & Brown Inc. | 864.7 | U.S. |
| 7 | Jardine Lloyd Thompson Group plc | 847.0 | U.K. |
| 8 | BB&T Insurance Services Inc. | 842.3 | U.S. |
| 9 | Hilb Rogal & Hobbs Co. | 696.0 | U.S. |
| 10 | Lockton Cos. L.L.C. | 657.2 | U.S. |
(1) Gross revenues generated by insurance brokerage, consulting and related services.
Source: Business Insurance, July 16, 2007. |
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TOP TEN GLOBAL REINSURANCE BROKERS BY REINSURANCE REVENUES, 2006
($000)
Rank |
Company |
Reinsurance revenues |
Country |
| 1 | Aon Re Global | $942,000 | U.S. |
| 2 | Guy Carpenter & Co. L.L.C. | 880,000 | U.S. |
| 3 | Benfield Group Ltd. | 654,960 (1) | U.K. |
| 4 | Willis Re | 597,700 | U.K. |
| 6 | Towers Perrin | 165,700 | U.S. |
| 5 | Cooper Gay (Holdings) Ltd. | 133,660 | U.K. |
| 7 | Jardine Lloyd Thompson Group P.L.C. | 118,531 (1) | U.K. |
| 8 | BMS Group | 74,734 (1) | U.K. |
| 9 | Gallagher Re | 71,300 | U.K. |
| 10 | John B. Collins Associates Inc. | 64,400 | U.S. |
| (1) Fiscal year 2006.
Source: Business Insurance, October 29, 2007. |
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CROSS-BORDER SALES
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FOREIGN SALES BY U.S. INSURANCE COMPANIES
A majority-owned foreign affiliate of a U.S. company is defined as one that is located in another country and is more than 50 percent owned by a U.S. multinational.
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SALES OF INSURANCE OVERSEAS BY AFFILIATES OF
U.S. INSURANCE COMPANIES, 1997-2004 (1)
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Life |
Nonlife (2) |
Total |
Year |
Sales
($ millions) |
Percent change from prior year |
Sales
($ millions) |
Percent change from prior year |
Sales
($ millions) |
Percent change from prior year |
| 1997 | $19,206 | NA | $43,661 | NA | $62,867 | NA |
| 1998 | 20,727 | 7.9% | 43,137 | -1.2% | 63,864 | 1.6% |
| 1999 | 24,970 | 20.5 | 45,271 | 4.9 | 70,241 | 10.0 |
| 2000 | 33,140 | 32.7 | 50,743 | 12.1 | 83,883 | 19.4 |
| 2001 | 33,059 | -0.2 | 46,406 | -8.5 | 79,465 | -5.3 |
| 2002 | 40,930 | 23.8 | 51,908 | 11.9 | 92,838 | 16.8 |
| 2003 | 44,393 | 8.5 | 56,015 | 7.9 | 100,408 | 8.2 |
| 2004 | NA | NA | 60,647 | 8.3 | NA | NA |
(1) U.S. majority-owned companies. As of 2004, excludes sales by U.S. bank holding companies.
(2) Includes accident and health insurance.
NA=Data not available.
Source: U.S. Department of Commerce, Bureau of Economic Analysis, International Investment Division. |
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SALES OF INSURANCE IN THE UNITED STATES
BY FOREIGN-OWNED COMPANIES
A foreign-owned insurance company is defined as one that is at least 50 percent owned or controlled by a foreign person or business group.
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SALES OF INSURANCE IN THE UNITED STATES BY FOREIGN-OWNED COMPANIES, 2002-2004 (1)
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Life |
Nonlife (2) |
Total |
Year |
Sales
($ millions) |
Percent change from prior year |
Sales
($ millions) |
Percent change from prior year |
Sales
($ millions) |
Percent change from prior year |
| 2002 | $44,917 | NA | $63,619 | NA | $108,536 | NA |
| 2003 | 43,869 | -2.3% | 68,324 | 7.4% | 112,193 | 3.4% |
| 2004 | 45,721 | 4.2 | 64,232 | -6.0 | 109,953 | -2.0 |
(1) Foreign majority-owned companies. Due to reclassifications resulting from the 2002 benchmark survey, data prior to 2002 are not available.
(2) Includes accident and health insurance.
NA=Data not available.
Source: U.S. Department of Commerce, Bureau of Economic Analysis, International Investment Division. |
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CAPTIVES
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Over the years, a number of alternatives to traditional commercial insurance have emerged to respond to fluctuations in the marketplace. Captives—a special type of insurance company set up by a parent company, trade association or group of companies to insure the risks of its owner or owners—emerged during the 1980s, when businesses had trouble obtaining some types of commercial insurance coverage. Other so-called alternative risk transfer (ART) arrangements include self insurance, risk retention groups and risk purchasing groups.
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LEADING CAPTIVE DOMICILES, 2007
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Number of captives |
Rank |
Location |
2006 |
2007 |
| 1 | Bermuda | 989 | 958 |
| 2 | Cayman Islands | 740 | 765 |
| 3 | Vermont | 563 | 567 |
| 4 | British Virgin Islands | 400 (1) | 409 (1) |
| 5 | Guernsey | 381 | 368 |
| 6 | Barbados | 235 | 256 |
| 7 | Luxembourg | 208 | 210 |
| 8 | Turks and Caicos Islands | 169 (2) | 173 (1) |
| 9 | Hawaii | 160 | 163 |
| 10 | South Carolina | 146 | 158 |
| 11 | Isle of Man | 161 | 155 |
| 12 | Dublin | 154 (3) | 131 |
| 13 | Nevada | 95 | 115 |
| 14 | Arizona | 83 (3) | 108 |
| 15 | Utah | 30 | 92 |
| 16 | D.C. | 70 | 77 |
| 17 | Singapore | 60 | 62 |
| 18 | Switzerland | 48 | 48 |
| 19 | New York | 39 | 44 |
| 20 | Labuan | 26 (1) | 31 |
| | Total top 20 | 4,757 | 4,890 |
| Total worldwide | 4,951 | 5,119 |
(1) Business Insurance estimate.
(2) Excludes credit life insurers.
(3) Restated.
Source: Business Insurance, March 3, 2008. |
| - The number of worldwide captives increased from 3,361 in 1997 to 5,119 in 2007, according to Business Insurance.
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