32 Key Insurance Statistics Across the Industry: Premiums, Claims & More
Nathan Weller is an Insurance Expert focusing on insurance for small business. He has 15 years experience in insurance operations, FNOL, and claims handling.
This article is part of a larger series on General Liability Insurance.
Insurance is a global business that significantly impacts economies, businesses, and individual lives. And, of the 32.5 million small businesses in the United States, 7 million currently depend on commercial insurance to continue operations.
Here are some insurance statistics that show just how vital and extensive the insurance industry is and how it’s growing.
4 Insurance Industry Stats About the Economy
The conversation around the global economy is often on trade surpluses and trade deficits. But insurance is a significant part of the worldwide economy.
$5.2 Trillion • Gross Insurance Premiums Worldwide
Insurance is a global industry, and $5.2 trillion represents premiums for all forms of insurance for members of the Organisation for Economic Co-operation and Development (OECD).
9.45% • Total GDP for All OECD Countries
$5.2 trillion represents, on average, nearly 10% of the gross domestic product (GDP) of all OECD member countries. Since insurance is an industry that impacts many sectors, such as auto repair, auto sales, home repair, medical workers, and pharmaceuticals, insurance fills a large spot in a country’s GDP.
56.2% • US Percentage of OECD
While insurance is global, the US market dominates by occupying more than half of gross premiums for members of the OECD.
12.53% • Total GDP for US Economy
In 2021, insurance occupied more than 10% of the US GDP. This includes $314 billion in insurance premiums paid by small businesses.
7 Insurance Industry Statistics About Premiums
While money can’t buy happiness, you can purchase peace of mind with insurance. These seven statistics show that the cost of that peace of mind is rising.
9.1% • Premium Increase in 2021
Property and casualty insurance increased by 9.1% in 2021, from $655.5 billion in 2020 to $715.9 billion in 2021. The premium increase is a trend, with a 10% increase in commercial insurance pricing in the second quarter of 2022. This marks the 13th consecutive quarter when premiums have increased.
3.5% • Premium Increase for Product Liability
The total premium spent on product liability in 2021 is $3.353 million. This is an increase of 3.5% from 2020.
13% • Premium Increase for Director & Officers Insurance
Directors & officers (D&O) insurance increased by 13% in 2021, the second-highest premium increase in commercial. Commercial umbrella insurance grew the most at around 20%.
$1.35 Trillion • Total Premiums in the US
Property and Casualty premiums are 53% of total premiums in the US. Life insurance and annuities fill out the other half, with a contribution of $635.7 billion. Total premiums paid in the US are $1.351 trillion.
50.2% • Total Commercial Lines Premium
In the US market, personal lines (auto and homeowners) represent 49.8% of all premiums, or $356.3 billion. Commercial lines account for 50.2%, or $359.6 billion.
38 • Consecutive Quarters of Premium Rate Increase
If your business has a commercial auto policy, you’re probably already aware that the price goes up yearly. The fourth quarter of 2021 saw an increase of 8% for commercial auto, marking 38 consecutive quarters with rate increases.
6.2% • Total Net Premiums
Workers’ compensation is the second-largest commercial line, with 6.2% of total net premiums in 2021. Other liability, encompassing multiple liability products, is the largest commercial line.
4 Stats on Insurance Industry Demographics
Insurance is for everyone, so it makes sense that the insurance industry should be diverse and reflect the population. These four statistics will show you how the industry is doing.
1.6 Million • Insurance Carrier Employees
In 2021, there were 628,600 employees in property & casualty, 911,400 in life insurance, and another 26,900 with reinsurance carriers. Including agencies, brokers, and related services, there were 2.8 million employees in the industry.
9% • Increase in Employment
Insurance brokers and agencies are expected to grow by 9% by 2024. Similar to workers’ comp, insurance is a commodity that comes with a legal requirement to purchase. Therefore, it can weather economic downturns much better than other industries.
50% • Agents Are Female
In the US, 50% of the agents are female, and 58.2% of claims service professionals are women. However, only 11.8% of agents (male or female) are African American, and 16% (male or female) are Hispanic or Latino.
47% • Insurance Employees Are Female
Just under half of the insurance employees are female. Female representation is the highest for claims and policy processing clerks, with 78.2% of female employees.
9 Small Business Claims Statistics
Unfortunately, at some point in time, we may need to file an insurance claim.
40% • Chance a Small Business Will File a Claim
A widely cited study by The Hartford found that 40% of small business owners will file a claim within 10 years. The claim may be a property or liability loss.
$300 Million • Large Loss Fire Loss
Seven of the top 10 large loss fires in 2020 are related explicitly to commercial losses. Of those, the largest was a fire in a warehouse for online sales. The estimated loss for that fire was $300 million.
Every 23 Seconds • Fire Occurs
In 2020, it was reported that fire departments responded to the report of a fire every 23 seconds. Fire losses were up 2.6% in 2020 for commercial lines.
$7 Million • Product Liability Jury Awards
In 2020, for product liability injury claims that went to trial and received a verdict from a jury, the average award was $7,058,106. This is significantly higher than the average award for general business negligence, which was $3,110,297
68% • Increase in Data Compromises
Cyber security is increasingly crucial in an age when everyone’s essential data is in the cloud. The average data breach cost rose from $3.86 million to $4.24 million in 2021, with a 68% increase in data compromises.
48% • Increase in Firms Hit With Cyber Attack
A study by insurer Hiscox found that the proportion of firms attacked increased from 43% in 2021 to 48% in 2022. One in five businesses attacked stated the survival of their firm was threatened. This highlights the increasing importance of cyber insurance.
$17,000 • Median Cost of Cyber Claim
The median cost of a cyber claim was slightly more than $17,000 in 2022. This represents an increase of 29% since 2021.
Burglary and Theft • Most Common Claim
Frankenmuth Insurance states that burglary and theft are the most common business claims. This is followed by water-related damage, wind and hail, fire damage, and slip and fall claims.
$308.6 Billion • Annual Cost of Fraud
Insurance fraud significantly impacts the US economy costing $308.6 billion annually. Property and casualty fraud totals $45 billion, and workers’ compensation fraud is $34 billion.
5 Personal Lines Claims Statistics
Insurance isn’t just for your business but for all aspects of your life. These statistics show how important insurance is for your home and car.
97.7% • Homeowners’ Claims Are Property Damage
97.7% of claims filed by homeowners were for property damage. This includes 0.6% of the claims for theft. Only 2.3% of claims filed were for liability.
$77,340 • Average Cost of Most Expensive Homeowners Claim
According to the above report, fire and lightning were the most expensive homeowners’ claims ($77,340). Liability claims averaged $30,324.
1 in 20 • Homeowners File a Claim
The frequency of claims filed means that, on average, 1 in 20 homeowners will file a claim every year. This is why insurance is so important.
Less than 80% • of Auto Owners have ‘Full Coverage’
While “full coverage” isn’t an actual coverage selection, policyholders using this typically mean their vehicle has collision and comprehensive coverage. However, less than 80% of auto owners have those two coverages.
$96 Million • Incurred Auto Loss
In 2021, the total incurred loss for liability coverage was $96,104,094. The physical damage was $73,846,463.
3 Insurance Industry & COVID-19 Statistics
The COVID-19 pandemic has had a significant impact on society, including the insurance industry. While the actual cost and long-term consequences are still being assessed, here are some key insurance statistics we know.
$10.5 Billion • Premium Returned
Because of the global lockdown, auto insurers returned more than $10 billion to customers through premium reimbursements. Insurers also pledged more than $200 million to national and local organizations handling the pandemic-related problems.
$90 Billion • Life Insurance Claims Paid
According to the American Council of Life Insurers, life insurance companies paid more than $90 billion in 2020. This is the highest recorded amount for a single year.
19% • Increase in Life Insurance Policies
While the life insurance industry paid out a record amount, sales of life insurance policies grew by 19% from 2019 to 2020.
Insurance Industry Statistics Frequently Asked Questions (FAQs)
Does business insurance cover COVID-19?
Since 2006, most commercial policies have had a virus and bacteria exclusion in place, meaning there’s no coverage for COVID-19-related losses. This is an ongoing issue—insurers are arguing covering losses related to a pandemic would bankrupt them and a program similar to Terrorism Risk Insurance Act (TRIA) needs to be established.
What is the largest insurance company in the world?
By revenue, the top insurance company in 2021 is Berkshire Hathaway. The second largest is Ping An Insurance, a life insurance company.
What is the largest private auto insurance company?
Measured by direct written premiums in 2021, State Farm is the largest personal auto insurer. Berkshire Hathaway and Progressive Corp. are second and third, respectively.
What is the largest commercial lines insurance company?
Using the measurement of direct written premiums, Chubb Ltd. is the largest US insurer for commercial lines in 2021. It’s followed by Travelers Companies Inc. and Liberty Mutual.
Bottom Line
These insurance stats show the importance—and cost—of insurance. While premiums are increasing, the cost of claims also continues to rise, and the cost of not having insurance is too great of a risk.
