19 Insightful Insurance and Insurance Industry Statistics

They say you can’t put a price on peace of mind—but that’s not the case if you look at insurance costs! The insurance industry is a cornerstone for businesses, homeowners, and everyday consumers. Check out these insurance statistics to see just how this industry is growing and changing.

1. Life & health insurance account for over half of the insurance industry.

Of the net insurance premiums paid in 2017, 52% of them went to life or health insurance companies. The other 48% went to property and casualty premiums.

2. Worldwide, the gross value of insurance premiums is over $5 trillion.

Because insurance is necessary (or at the very least, important) for almost every area of people’s lives and livelihoods, this industry is worth trillions of dollars and covers the globe.

3. There are nearly 6,000 insurance businesses in the U.S. alone.

In 2016, the National Association of Insurance Commissioners reported that there were 5,977 insurance companies nationwide. This includes property, health, auto, title, and other types of insurers.

4. Commercial (business) insurance premiums in 2017 amounted to around $730 billion.

Businesses need insurance. It’s not only a smart move, but in most cases, it’s the only way to run a business legally. This means that the commercial insurance business spans the globe and is worth quite a bit of money (over $700 billion, in fact).

5. Chubb Ltd. & Travelers Companies Inc. are tied for the highest market share of the commercial insurance industry.

Both of these companies have 5.6% of the commercial insurance market—meaning that together they make up 11.2% of the entire market.

6. 75% of businesses are underinsured.

Although most businesses know the value of having insurance to cover unexpected hazards or losses, still the vast majority are not sufficiently covered to actually provide an effective safety net.

7. 40% of small businesses don’t carry any type of business insurance.

As if it wasn’t enough that many businesses are underinsured, some don’t have insurance at all! Although many do this in an effort to save money, in the long run, it may cost them more if they do experience a serious loss.

8. The most common type of insurance for small businesses is the Business Owners Policy, or BOP.

To acquire this insurance, small businesses must meet certain requirements, such as not exceeding a certain amount of gross revenue and number of employees.

9. The average cost of business insurance is around $1,281 per year.

When you look at all the different types of business insurance policies and take an average, the cost turns out to be just shy of $1,300 per year, or a little over a hundred dollars a month. Not too bad of a cost, considering it helps you ensure your assets are protected!

10. The most expensive businesses to insure are demolition, construction, mining, & manufacturing.

Due to the potential for highly dangerous and costly incidents, these types of businesses are highly expensive to insure. On the other hand, businesses that offer services (for example, accountants, retailers, etc.) and are situated in office buildings are the cheapest to insure.

11. There are about seven different types of commercial (or business) insurance.

From general liability to workers’ compensation, there are a number of different insurance policies for businesses. These vary in price and purpose, and the types you need will depend on the details of your business.

12. Nearly $100 billion of the global commercial insurance market is purchased by “micro enterprises.”

These businesses include not just small businesses, but tiny businesses—that is, self-employed individuals or companies that consist of less than 10 employees. They may be small, but the amount they collectively spend on insurance isn’t!

13. Businesses have about a 40% chance of filing an insurance claim.

Across a ten-year period, 40% of businesses will file a claim with their insurance company due to losses sustained. This means that it’s more than likely that having insurance will pay off at some point during the life of your business.

14. Burglary & theft account for the majority of insurance claims.

20% of all insurance claims are filed because of losses due to theft, whether from a shifty customer or a sticky-fingered employee. Even though this insurance statistic shows that theft is the most common claim, it’s also the one that is typically the smallest in terms of dollar amount.

15. The most expensive claims are reputational harm & vehicle accidents.

Though these two claims occur relatively infrequently, they are the costliest for insurance companies. Reputational harm is typically a $50,000 claim, while vehicle accidents come in at $45,000.

16. The Hartford is considered the best insurance company for small businesses.

Due to its high ratings and specialists who help match companies to their ideal policies, The Hartford is the top choice for small businesses seeking insurance.

17. Only 31% of small businesses have cyber insurance.

This is problematic, because small businesses are highly vulnerable to cyberattacks, and are thus the most frequent targets! Adding cyber insurance onto the main business policy may be a wise move for small-to-medium businesses.

18. The majority of small businesses don’t make insurance purchases online.

Only 24% of small and medium businesses purchased their commercial insurance online. However, 48% say they’d prefer to buy online when they switch providers—meaning the demand for online options may be increasing.

19. 36% of small businesses prefer to make insurance claims digitally.

Convenience really is king, and if you’re running a business, it’s important to make insurance claims as efficiently as possible. Over a third of small businesses report that they’d rather make these claims online in order to streamline their day-to-day.

The Bottom Line

As seen with these insurance statistics, not only is commercial insurance incredibly crucial to SMB operations, but there is also a wide variety of options, and not every business will have the same insurance needs. It’s important to talk to expert advisors when you’re purchasing a policy to make sure that you’ll be covered in the worst-case scenario.

For insurers, we’re seeing trends toward more online experiences for convenience and increased coverage for digital assets. The tech trend isn’t dying out anytime soon, so insurers will need to be ready to accommodate these changes!