Property/Casualty Insurance Carriers

Property/Casualty Insurance Carriers

Brief Excerpt from Industry Overview Chapter:

Companies in this industry underwrite insurance policies such as homeowners and automotive insurance to protect consumers and businesses against loss and liability. Major companies include Nationwide Mutual, State Farm, and the property/casualty arms of AIG and The Hartford Financial Services Group (all based in the US), and Allianz (Germany), AXA (France), People's Insurance Group of China Co. (China), Tokio Marine (Japan), and Zurich Insurance (Switzerland).

COMPETITIVE LANDSCAPE

Demand is driven by demographics, consumer spending, and commercial transactions, as well as by legal or financial requirements affecting customers. Consumers are usually required by states to buy auto insurance and by lenders to buy homeowners insurance, for example. The profitability of individual companies depends on effective marketing and on the ability to accurately estimate future claim payments and maintain adequate reserves. Large companies benefit from economies of scale in administration and in access to capital, as well as advertising and marketing. Small companies can compete successfully by specializing in particular products or industries. The US industry is highly concentrated: the 50 largest firms account for more than 80% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include underwriting services for vehicle property and liability insurance policies, which account for about 45% of the industry's revenue. This is followed by personal vehicle and liability insurance policies, accounting for about 40%. Other services include homeowners' multiple peril insurance policies (about 15%), worker's compensation insurance, and commercial vehicle property insurance.