Companies in this industry underwrite insurance policies and annuities that are paid out in the case of death, illness, injury, or damage to property. Major companies include Anthem, AIG, MetLife, Prudential Financial, State Farm, and UnitedHealth (all based in the US), along with Allianz (Germany), Assicurazioni Generali (Italy), AXA (France), and Ping An Insurance (China).
Demand is driven by demographics 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. Life insurers face an aging population, which could result in rising claims. The profitability of individual companies depends on effective marketing and on the ability to accurately estimate future payments. Large companies have big 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 concentrated: the 50 largest companies generate about 65% of revenue. Concentration is higher in some industry segments.
Products, Operations & Technology
Major products include health and medical insurance, which accounts for about 40% of industry revenue; life insurance (about 30%); and property and casualty insurance (about 25%). Other products include title insurance and reinsurance.