20 Insightful Insurance Statistics
Virginia has extensive experience writing about insurance and finance for a number of online platforms. She brings this expertise to business insurance and life insurance content across Fit Small Business.
This article is part of a larger series on General Liability Insurance.
People might think that insurance is boring, but the 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.
8 Insurance Industry Statistics About Premiums
They say you can’t put a price on peace of mind. Clearly, they’re wrong because insurers do this all of the time. These eight statements about insurance premiums show why the industry is big business.
$5.3 Trillion • Gross Insurance Premiums Worldwide
That may seem like an absurdly large number, but $5.3 trillion in gross premiums makes sense when you remember that insurance touches almost all areas of people’s lives and livelihoods worldwide.
In the News:
The top 10 largest insurance markets anticipate a nearly 7% drop in their gross domestic product (GDP) this year due to COVID-19. An expert with the Insurance Information Institute believes this will impact revenues generated through both premium and investments.
49% • United States Percentage of World’s Gross Insurance Premiums
Not only is insurance a trillion-dollar business across the globe, but the industry is huge in the US, too. The gross value of insurance premiums in the US is 2.6 trillion, the highest of all reporting countries in the Organisation for Economic Co-operation and Development (OECD). Moreover, insurance makes up over 11% of the GDP.
52% • Percent Total Net Premiums From Life & Health Insurance
Of the $1.3 billion in net insurance premiums paid in 2019, 52% of them went to the annuities, life, and health and accident insurance. The other 48% went to property and casualty (P&C) premiums, which includes auto, home, and commercial policies.
53% • Percent of P&C Net Premiums From Personal Lines
Zeroing in on personal lines (i.e., insurance for individuals) shows us that they made up slightly more than 53% P&C net premiums in 2019, or approximately $340 billion. Commercial lines accounted for 46% of net premiums, or $299 billion.
$65 Billion • Amount of Direct Premium Written by the Leading P&C Insurer
State Farm is the leading property and casualty insurer in the US ($65 billion in direct premium). Top carriers in other categories include UnitedHealth Group ($106 billion in direct premium) for health insurance and MetLife ($95 billion in direct premium) for life and annuities.
5.5% • Market Share Earned by the Top Commercial Insurers
When you narrow down the P&C market to just commercial lines, Chubb and Travelers both earn 5.5% of the commercial insurance market—meaning that together they make up 11% of the entire market. Liberty Mutual follows close behind with 5% of the market.
$500 • Median Annual Premium of General Liability Insurance for Small Businesses
An analysis of 28,000 small business insurance policies purchased through online brokerage Insureon showed general liability insurance costs just $42 per month. Add property coverage to that in a business owner’s policy, and your monthly premiums is $53, resulting in at least $500 spent on general liability every year.
$2,878 • Average Annual Auto Insurance Premium in Michigan
With an average premium of $2,878 per year, Michigan is the most expensive state for auto insurance. This is partly because the state required drivers to carry unlimited personal injury protection. Premiums may drop now that this requirement changes in July 2020, but the refunds carriers made due to COVID-19 could impact how much.
5 Insurance Claims Statistics
The weird thing about insurance is you buy hoping you never actually have to use it. Unfortunately, many of us will have to make a claim at some point, but that’s better than facing a catastrophe without coverage.
98% • Percent of Home Insurance Claims Due to Property Damage
Property damage caused by events like windstorms or hail caused 98.1% of homeowner’s claims during 2014 and 2018. However, the average liability claim during the same time was significantly more costly than the average property claim: $20,371 compared to $13,687. Both stats make the average homeowner’s premium of $1,211 look like a pretty good deal.
40% • Chance of a Small Business Filing an Insurance Claim
Across a 10-year period, 40% of businesses will file a claim with their insurance company. This means that it’s more than likely that having coverage will pay off at some point during the life of your business.
$50,000 • Average Cost of a Reputational Harm Claim for Small Business
While accusations of reputational harm, such as defamation and copyright infringement, cause less than 5% of small business insurance claims, they are the costliest for insurance companies to cover. Vehicle accidents come in second at $45,000.
20% • Percent of Small Business Insurance Claims Due to Burglary & Theft
Whether they fall victim to a shifty customer or a sticky-fingered employee, small business owners need to protect themselves from criminals. Even though this insurance statistic shows that theft is the most common, it’s also typically the lowest cost claim at just $8,000.
36% • Percent of Small Businesses That Prefer to Make Insurance Claims Online
Convenience really is king, and small business owners want the claims process to be as efficient as possible. Not only do more than a third of small businesses report that they’d rather make claims online, but 55% want to be able to track claims there too.
3 Insurance Industry Employment Statistics
Are you looking for work? Insurance may be a good option. While the coronavirus pandemic will most likely have an impact on this, the industry tends to be a stable employer. Plus, it has a place for salespeople, actuaries, and customer service representatives—just to name a few.
5,965 • Total Number of Insurance Companies
In 2018, the National Association of Insurance Commissioners reported that there were 5,965 insurance companies nationwide. This includes property, health, auto, title, and other types of insurers.
2.8 Million • Individuals Employed the Insurance Industry
Employment in the insurance industry appears to be fairly robust. Preliminary reports from the Bureau of Labor Statistics (BLS) show that insurance has employed approximately 2.8 million people since August 2019. Moreover, the BLS’s Occupational Outlook Handbook shows some insurance jobs growing faster than average, particularly actuaries (18% growth) and agents (5% growth).
59.4% • Percent of Women Employed by the Insurance Industry
In 2016, insurance CEOs pledged to increase diversity, and their efforts have shown some success. The most recent data shows 1.6 million women in insurance make up more than half the industry—far more than the 47% in the total US workforce. Additionally, Black workers make up almost 22%, and Hispanic/Latinx workers account for 15% of claims processors, compared to 12% and 18% for all occupations, respectively, according to recent labor force statistics.
4 Insurance Purchasing Statistics
This section may be most interesting to insurance agents looking to sell commercial lines. These four insurance statistics can give you insight into the coverage your clients may be lacking and how you might best address that.
22% • Percent Drop in Workers’ Compensation Insurance Purchases for Small Business
Only 47% of small business owners bought workers’ comp in 2018, compared to 69% in 2014. Much of this 22% decrease in purchases is attributed to a growing gig economy and uncertainty around the Affordable Care Act. Chances are COVID-19 will keep this trend going.
54% • Percent of Small Business Owners Who Buy General Liability Insurance
Only 54% of small businesses had this fundamental coverage in 2018. That’s more than half, which is good, but it’s a decrease from 61% in 2014. The most likely culprit for this drop is increasing rates—always a problem when you’re talking about small business insurance. However, general liability covers some of the most common and most expensive claims and is usually well worth the cost.
31% • Percent of Small Businesses That Have Cyber Insurance
Lacking cyber insurance is problematic because small businesses are highly vulnerable to cyberattacks. In fact, according to the most recent data available, one out of 10 small businesses suffer a cyber incident. This makes cyber insurance a wise investment for any small businesses that have data to protect.
76% • Percent of Small Businesses That Don’t Buy Insurance Online
Only 24% of small and medium-sized businesses went online for their most recent commercial insurance purchase. Of those who are looking to switch providers, 48% said they’d prefer to buy online—indicating the demand for online options may be increasing. COVID-19 may accelerate this trend, at least for the initial quote. However, more complex risks typically need additional counsel from insurance professionals.
Bottom Line
These insurance statistics show just what a dynamic, complex, and essential industry insurance is. Whether you’re a small business owner looking for general liability or a new homeowner looking to protect your most valuable asset, insurance is crucial to the worst-case scenario.
For insurance professionals, we’re still seeing a preference for a more seamless online experience and a need to encourage consumers to purchase the policies they need. COVID-19, however, will most likely make these goals difficult to achieve.
