US Insurance Industry Statistics
The five most common types of insurance in the US are as follows:
- Health insurance – Research shows that a lack of adequate health insurance accounts for nearly 67% of all bankruptcies.
- Auto insurance – The average annual cost of car insurance in 2018 was roughly $1,430.
- Life insurance – One in every three families struggle to meet their daily expenses during the first month of the death of their main wage earner.
- Property insurance – Property damage accounts for nearly 98% of all claims.
- Travel insurance – Americans are traveling more than ever before. In 2016, there was a 19% jump in travel insurance spending.
There are 5,954 insurers in the US, with nearly 42% of them operating in the P&C insurance industry niche. Other top insurance niches in the US are health (15%) and L&A (14%).
Allstate topped the list of the top five writers of P&C insurance based on direct premiums written. State Farm and Berkshire Hathaway came in second and third place, respectively. In the fourth position was Liberty Mutual, while Progressive came fifth.
In the L&A niche, Metlife emerged as a clear winner, according to US insurance industry statistics, followed by Prudential and New York Life. The last two positions went to the Commonwealth of Massachusetts Group Insurance Commission and AIG.
The Insurance Industry Market
6. The US ranks at the top among the world’s gross written premium (GWP) insurance markets.
Japan, which held the third position in 2007, is in second place. Meanwhile, China, which was on the bottom rung previously, came third.
7. Recent insurance statistics reveal that most of the current top 10 countries on the basis of gross written premiums also featured in 2007’s list of the same.
Nonetheless, many entrants have swapped places among themselves since then. Taiwan ranked 14th in 2007, is the only newcomer. It’s currently placed 10th.
8. Most developed countries have either dropped a place or two or maintained their original position.
For example, while the US, South Korea, and Canada have maintained their earlier positions, the UK and Italy are down two positions. In contrast, Germany and France have both dropped one place.
Insurance Industry Growth
9. According to the latest available insurance revenue statistics, emerging markets recorded a 43% growth in insurance from 2010 to 2017.
In comparison, North America, Japan, and the Asia Pacific (APAC) region grew at an impressive 73% for the same time period.
10. On a year-over-year basis, the insurance industry registered a growth of 4% in 2017.
However, both the health and P&C segments recorded a better-than-average growth of 5%.
11. P&C, the second largest segment in this niche, accounts for roughly 30% of the total insurance market.
On the other hand, health insurance, the third-largest segment, makes up 23%. In contrast, the life insurance market, which accounts for 46% of total premiums, was up by 3.2% from 2016 to 2017.
The Future of the Insurance Industry
Dramatic changes are reshaping how the insurance industry works, and forward-looking insurers aren’t just sitting on their hands. Instead, they’re making bold decisions and investing in becoming more customer-centric while increasing operational efficiency.
However, with stakes being so high and change coming at such a rapid pace, what are the right areas to focus on?
As the latest insurance industry outlook report shows, the following three issues should be on every insurance company’s radar:
1. Cloud computing – It allows auto insurers to provide personalized offers to consumers, like pay-as-you-go insurance while cutting down on their operational costs. Given these benefits, it’s no surprise that 70% of carriers have embraced this technology.
2. Blockchain – It reduces administrative costs by automating claims verification and payment requests.
3. Cybersecurity – A recent insurance industry analysis revealed that cybersecurity is something insurers should take very seriously. Cyber insurance, which protects individual users and businesses from internet-based risks, is expected to cross the $20 billion mark by 2020. That’s an 11 times growth in just three years!
Insurance Industry Challenges
The speed of technological changes, evolving consumer behavior, and new market entrants are three of the biggest challenges for insurers.
As per the infographic below, which gives a detailed insurance industry overview, three out of ten insurers believe that the rate of technological change is exceeding their ability to adapt. On the other hand, 21% of insurers expressed concern about changing consumer behavior, and 10% are worried about the new players in the market.
In addition to these, several other key issues impact the insurance industry:
1. Skill shortages – According to the recent insurance statistics, 64% of insurers are concerned about rising labor costs, and 48% believe that the scarcity of key skills affects their quality standards and the customer experience.
2. Economic slowdown – Is the next recession on the horizon? Some experts believe there’s a 30%–40% chance it will hit by late 2020.
3. IFRS – Designed to be the common language of the international accounting world, International Financial Reporting Standards (IFRS) are accounting standards released by the IFRS Foundation in conjunction with the International Accounting Standards Board (IASB). Starting January 1, 2021, the IFRS 17 regulation will replace the current standard (IFRS 4). However, as shown in the following infographic, which provides an in-depth insurance industry overview, 63% of the world’s insurers aren’t yet ready for it.
The global insurance industry is in good shape, with the US leading the pack. Research shows that the future of this industry looks bright, especially if the global economy remains healthy and the insurance industry finds a way to deal with the issues troubling it—namely the rate of technological change, changing consumer behavior, and skill shortages.