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 State Farm, Nationwide Mutual, and the property/casualty arms of AIG and The Hartford Financial Services Group (all based in the US), and Allianz (Germany), AXA (France), PICC (China), Tokio Marine (Japan), and Zurich Insurance (Switzerland).
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 motor vehicle insurance (about 40% of industry revenue), home and other property insurance (30%), and general liability insurance (15%).