The State of Insurance Industry – 2023 (Statistics & Facts)

By Alex Kopestinsky
Last modified: March 5, 2023

Essential insurance industry statistics that every insured in the US must know. We also included the yearly insurance overview and industry growth projections.

Insurance statistics show that the industry has had a pretty good run lately, thanks mainly to three factors: sustained economic growth, better interest rates, and greater investment income.

But will the trend continue? What’s in store for the insurance industry in 2021 and beyond?

If recent figures are any indication, there’s every reason to believe 2021 will turn out to be yet another good year—maybe even a banner year—especially if potential headwinds, like a slowing world economy or the trade war between the US and China, don’t play spoilsport.

Insurance Industry Trends – Key Developments in the Past 5 Years

While the latest data isn’t available, the results from 2018—powered by sustained economic growth, improved interest rates, and greater investment income —have set the stage for impressive growth this year. The US property and casualty (P&C) sector had a great start to 2018, with its net income more than doubling to reach over $34 billion.

However, recent data on non-US insurance industry profits show that, while the rest of the global insurance industry is also expanding, its growth isn’t as impressive as its American counterpart.

In 2017, US premiums written in the P&C sector were up by 4.6%, the highest percentage increase in the past decade. Even more impressive was the growth of 12.7% in the first six months of 2018.

Global markets, however, grew at a modest pace, with other advanced markets registering a premium growth of only 1.9%. Nonetheless, developing markets performed a tad better, growing at a rate of 6.1%.

The State of Insurance Industry – 2020 (Infographic)

1. In 2015, insurance carriers contributed more to the US GDP than banks for the first time in history.

And this trend has continued since then. In 2017, the insurance sector’s contribution to the country’s GDP was an impressive 3.1%. In contrast, the banking industry’s share stood at 2.9%.

2. Net premiums written for the US insurance industry in 2017 amounted to $1.2 trillion.

Insurance revenue data shows that life and annuity (L&A) insurers accounted for 52% of the net premiums written in 2017, while property and casualty (P&C) insurance made up the remaining 48%.

3. The total property and casualty insurance direct written premiums totaled $558.2 billion in 2017.

P&C insurance mainly consists of auto, commercial, and home insurance. Typically, health insurance is regarded as separate. That sector includes not only health insurance companies but also government-provided programs.

4. The latest available insurance company revenue data shows that private health insurance direct written premiums totaled $867.5 billion in 2017.

Health insurance alone accounted for $670.1 billion, whereas $190.8 billion came from the life and annuity segment, and $6.5 billion from property and casualty annual statements.

5. 2018’s total number of employees in the US insurance industry was 2.7 million.

Of these, 1.5 million were employed with insurance companies, while the remaining 1.2 million were insurance agents or brokers, or they worked for other insurance-related enterprises.

Infographic showing the state of Insurance Industry

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.

Conclusion

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.

FAQs

How many insurance companies are in the US?

There are 5,954 insurers in the US in total. The property and casualty niche is the largest segment of the insurance industry and accounts for 2,509 of these insurers. The other two big segments are health, with 907 insurers, and life and annuity, with 852 insurers. Additionally, there are 240 risk retention groups, 82 fraternal insurance companies, 58 title insurers, and 1,306 other companies.

How many insurance agents are in the US?

There were about 1.1 million insurance agents, brokers, and service employees in the US in 2017. Many people think insurance agents and insurance brokers are the same things, but that’s not the case. An insurance agent is someone who works for an insurance company and sells its products. An insurance agent can represent a maximum of one life insurance, one health insurance, and one general insurance company. A broker (often called an independent agent), on the other hand, works independently and offers customers a host of insurance products to consider.

The latest insurance industry trends reveal that, even though many people are now buying insurance online, the job prospects in this niche remain good. As a matter of fact, research shows that the employment of insurance agents grew by around 10% from 2016 to 2018, which is faster than the average of most other occupations. Most likely, this is because people still require agents to help them understand the options available and guide them when transitioning from quote to policy.

How big is the insurance industry?

In 2017, the insurance sector’s contribution to the US GDP stood at 3.1%. Net premiums written for the US insurance industry in 2017 amounted to $1.2 trillion, out of which 52% were written in the life and annuity segment, and the remaining 48% in the property and casualty sector. In 2018, the total number of employees in the US insurance industry was 2.7 million. 1.5 million were employed with insurance companies, and 1.2 million were either employed as insurance agents or brokers or they worked for other insurance-related enterprises.

Who regulates the insurance industry?

Insurers in the US are primarily regulated by the state they operate in rather than by any federal regulatory body. Typically, an insurance regulatory agency in the US bears the name “Insurance Bureau,” “Division of Insurance,” “Department of Insurance,” or something similar.

A state government official, generally called the Director of Insurance or the Commissioner of Insurance, heads this agency. Their primary function is to make sure all insurers in the state are financially sound and function in an honest and ethical manner.

How much is the insurance industry worth?

The net premiums written for the US insurance industry in 2017 amounted to $1.2 trillion. Research shows that life and annuity (L&A) insurers accounted for 52% of net premiums written in 2017, and property and casualty (P&C) insurance made up the remaining 48%.

P&C insurance is mainly comprised of auto, commercial, and home insurance. According to the insurance industry trends and research, the total property and casualty insurance of direct written premiums totaled $558.2 billion in 2017.

Typically, health insurance is regarded as a separate entity from these. This sector includes not only health insurance companies but also government programs. Private health insurance direct written premiums totaled $867.5 billion in 2017 according to the latest insurance statistics.

insurance Industry statistics
Table of Contents
Insurance Industry Trends – Key Developments in the Past 5 Years The State of Insurance Industry – 2020 (Infographic) US Insurance Industry Statistics The Insurance Industry Market Insurance Industry Growth The Future of the Insurance Industry Insurance Industry Challenges Conclusion