Introduction to Insurance Industry
Insurance and risk management make up an immense global industry. According to a survey conducted by a leading global insurance firm, Swiss Re, worldwide insurance premiums totaled $4.270 trillion in 2008 (the latest data available), up about 6.3% from $4.061 trillion in 2007. This was equal to about 6.18% of global GDP. Global life insurance premiums were $2.79 trillion during 2007, while all other types of insurance totaled $1.78 trillion.
In America alone, the insurance business employed about 2.31 million people in 2008, and insurance gross premiums totaled $1.13 trillion, making the U.S. the world’s largest insurance market. For 2009, life, accident (including supplemental health) and annuity premiums in the United States will total an estimated $679 billion. Property and casualty premiums will total about $450 billion for 2009. U.S. life insurance firms held about $4.51 trillion in assets in 2008, according to the Federal Reserve Bank. Approximately 4,500 companies underwrite insurance in America, but the industry is dominated by a handful of major players.
According to Swiss Re, total insurance premium volume for 2008 was $1.75 trillion in Europe; $933.3 billion in Asia; $104.9 billion in Latin America and the Caribbean; $29.2 billion in the Middle East and Central Asia; and $54.7 billion in Africa. Again, these figures are from Swiss Re (www.swissre.com).
Premiums on a per capita basis remain very low in much of the world, pointing to excellent long-term opportunity for expansion of sales of insurance products of all types, including annuities. While it will take many years for underdeveloped nations to begin spending significant amounts on insurance products, much of the world is still clearly a fertile field for expansion of companies that are willing and able to invest time and money in emerging markets.
Per capita premiums worldwide were $646 in 2008, compared to $2,990 in North America. More than 87% of