Insurance is a global industry that significantly impacts country economies, businesses, and individual lives. According to the Small Business Administration, there are 33.1 million small businesses in the US. With nearly half a million new small businesses starting every month, insurance is essential for their success. Inflation and natural disasters significantly impact insurance industry losses, and fraud continues to siphon off hundreds of billions of dollars annually.
Here are some business insurance statistics that show how vital and extensive the insurance industry is—and how it’s growing.
6 Business Insurance Statistics About the Economy
The conversation around the global economy focuses on tariffs, supply chain issues, and inflation. However, while it may not make the news, insurance remains a significant part of the worldwide economy.
1. $6 Trillion: Gross Insurance Premiums Worldwide
Insurance is a global industry. In 2022, the total premiums for all forms of insurance were $6 trillion in Organisation for Economic Co-operation and Development (OECD) member countries.
2. 9.3%: Total GDP for All OECD Countries
This $6 trillion represents, on average, nearly 10% of the gross domestic product (GDP) of all OECD member countries. 9.3% is down slightly from 9.45% during our last update on this article two years ago. So spending is down very slightly on insurance.
Because insurance is an industry that impacts many sectors, such as auto repair, auto sales, home repair, medical, and pharmaceuticals, it naturally fills a large spot in a country’s GDP.
3. $3.2 Trillion: Total US Premium Collected for Life and Nonlife Insurance
The total gross premiums for life and nonlife insurance (including property and casualty (P&C)) in the US in 2022 were $3.2 trillion. This figure is collected by the approximately 5,000 insurance companies in the US.
4. 54.5%: US Percentage of OECD
While insurance is global, the US market continues to be the dominant force, accounting for more than half of gross premiums collected by OECD members. This figure represents a decrease of nearly 2% from the previous year. The country with the next largest share is the United Kingdom, at 7.5%.
5. 9.3%: Average Spending GDP for OECD Members
The average OECD member spends 9.3% of its GDP on insurance. The amount in the US may be higher, with 20.7% of the US GDP generated by finance, insurance, real estate, rental, and leasing. Personal and commercial lines insurance are an important part of the American economy. This may be because, while it is a commodity, many state governments mandate purchasing coverages like personal auto and workers’ compensation.
6. 31.94%: Top Amount Spent on Insurance by an OECD Member
Luxembourg is an outlier among OECD members, spending 31.94%. Insurance is a significant part of Luxembourg’s economy, with many European insurance companies choosing Luxembourg for their headquarters. This may be due to the country’s regulatory environment.
12 Insurance Industry Statistics About Premiums
While money can’t buy happiness, you can use it to purchase peace of mind through insurance. Unfortunately, the cost of that peace is rising. The main takeaway from these insurance industry statistics is that insurance costs continue to rise.
1. $857.3 Billion: Total US Premium Collected for P&C Insurance
In the US, insurance companies collected over $800 billion in P&C insurance premiums in 2023. P&C is the category of insurance that small business coverages fall under. This is a 10.2% increase from 2022.
2. 6%: Average Quarterly Premium Increase Since 2020
Premiums continue to rise at an alarming rate. For 25 straight quarters, insurance premiums have increased at an average amount of 6%.
3. 30%: Uninsured Small Businesses
A survey conducted by small business insurer Next found that nearly 30% of business owners are uninsured. This small business insurance statistic shows continually rising insurance costs are a barrier for many.
4. 15%: Commercial Premium Increase
For the first half of 2023, commercial premiums increased by an average of 15%. The increase was driven by construction costs related to inflation and insurance companies’ rising rates to counter the increase in their reinsurance rates, which rose by 50% in 2023. Premium increases are also influenced by your claims history. While it is not a fool-proof way to avoid a loss, business liability waiver forms are one method a business can use to reduce its liability exposure.
5. 11.8%: Commercial Property Premium Increase
Commercial property saw an average premium increase of 11.8% in 2023, the highest increase among all commercial lines of business. As in previous years, this increase was driven primarily by construction costs related to inflation and insurance companies’ rising rates to counter the increase in their own reinsurance rates.
As a small business owner, there isn’t much you can do in this scenario if you own the property. However, if you are considering starting a business, renting a space may be more economical than purchasing one that will need to be insured.
6. 109.5%: Reinsurance Market Profit Income Increase Since 2022
Speaking of the reinsurance market, in 2023, the reinsurance market reported an increase of 109.5% over 2022. This net income translates into $4.5 billion. The financial stability of the reinsurance market has a direct bearing on the premium costs for the insurance market.
7. 46: Quarters Commercial Auto Insurance Has Increased
While not the highest overall increase, commercial auto insurance saw an increase of 7.3% in the fourth quarter of 2023. This marked 46 consecutive quarters where the premium for commercial auto insurance rose.
8. 3.5%: Premium Increase for Product Liability
In 2023, the total premium spent on product liability insurance, a very important coverage, was $4.4 million. This represented an increase of 3.5% from 2022. In 2022, the rate rose by 20.5%, so only rising by 3.5% the next year is a significant change.
9. 44.4%: Percentage of Life Insurance for Total US Premiums
Of the $1.5 trillion in premiums collected in the US for insurance, 44.4% were for life insurance products. This includes annuities and mortgage protection insurance. The 44.4% totaled $683.5 billion.
10. 48.6%: Total Commercial Lines Premium
In the US market, personal lines (auto and homeowners) represent 51.4% of all premiums, or $440 billion. Commercial lines account for 48.6% or $416.5 billion. This is a reversal. Commercial lines comprised about 51% of all premiums sold two years ago. Commercial lines include coverages like workers’ compensation and general liability.
This isn’t surprising since small businesses are the backbone of nearly every state’s economy. For example, Texas’ 3.1 million small businesses employ 4.9 million employees.
11. 19.7%: Total Market Share
The top three providers for workers’ compensation insurance—Travelers, The Hartford, and AmTrust—account for 19.7% of the total market share, an increase of 1% since 2021. The top three providers have maintained that spot for the past few years.
12. 45.82%: Total Market Share for Top Insurers
The top 10 providers for life insurance write nearly half of the market (45.82%). This is slightly less than P&C, where the top 10 providers write 48.07% of the market.
5 Insurance Industry Stats: Employment
Insurance is an important part of the economy and a large employer. Therefore, it makes sense that the insurance industry should be diverse and reflect the population.
1. 1.6 Million: Insurance Carrier Employees
In 2023, there were 680,500 employees in P&C, 912,300 in life insurance, and another 30,900 with reinsurance carriers. Including agencies, brokers, and related services, there were 2.9 million employees in the industry. The total combined employment for the insurance industry is 1.8% of the total number of employed persons in the US.
2. 9%: Increase in Employment
Insurance brokers and agencies are expected to grow by 9% by 2024. That’s because insurance like workers’ compensation is a commodity many are legally required to purchase. Therefore, it can weather economic downturns much better than other industries.
While agencies and brokers are expected to grow, the industry is currently struggling. Several larger companies, like Farmers Insurance or Nationwide, have had to lay off many employees recently.
3. 54.9%: Insurance Agents Who Are Female
In the US, 54.9% of agents are female, and 80.1% of insurance claims and processing clerks are women. This figure continues to grow. Two years ago, 50% of agents were women.
4. 59.4%: Insurance Employees Who Are Female
Previously, just under half of all insurance employees were female. However, as of 2023, 59.4% of all insurance employees are female.
5. 7 out of 12: Top Insurers That Have Pulled Out of California
In 2023, natural disasters cost insurance companies $79.6 billion. As natural disasters and inflation continue to make it difficult for insurance companies to remain profitable, more continue to pull out of states with higher costs of doing business because of natural disasters. Seven out of the top 12 insurance companies in California have stopped writing new policies.
17 Small Business Insurance Claims Statistics
Unfortunately, at some point, your business will experience a loss, and you must file a claim. Claims can be costly for your business—in terms of deductibles and any out-of-pocket expense that isn’t covered—and for the insurance company.
1. 56.4%: Occupations That Contribute Over Half of Workplace Injuries
Three occupations—service, transportation, and production—contributed over half of workplace injuries and illnesses between 2021 and 2022.
2. 79%: Workplace Fatalities
When it comes to workplace deaths, 79% came from two types of loss: falls and transportation incidents, which include vehicle crashes.
3. $678 Million: Large Loss Fire Loss
Five of the top 10 large-loss fires in 2021 were related explicitly to commercial losses. The largest was the Marshall Fire, which was a wildland fire. The fourth most expensive fire (total loss at $100 million) was a ship being repaired in Wisconsin.
4. 23 Seconds: The Rate Fire Occurs
In 2023, it was reported that fire departments responded to the report of a fire every 23 seconds. While commercial property insurance premiums may be on the rise, the risk of a fire is significant and could result in the total loss of your property.
5. 54%: Fewer Fires Than 1980
Despite the number of fires decreasing significantly since 1980 (accounting for inflation), the cost of property loss in 2023 is 3% higher than in 1980.
6. 3,205: Compromises in 2023
In the US, there were 3,205 total compromises in data from cyberattacks. Public data breach notices have almost doubled year over year. The estimated number of victims of data breaches since 2018 has increased 1,400%.
7. 59%: Percentage of Global Cyber Insurance Premiums Written in the US
In 2023, US companies wrote $9.84 billion of $16.6 billion in global premiums for cyber insurance, which is 59% of the total amount written globally. Cyber liability insurance continues to be an important part of a successful business plan, even for small business owners.
8. 30,000: Incidents of Cybercrime in 2023
Over 30,000 cybercrime incidents occurred globally from November 2022 to October 2023. Of those, small businesses reported 900.
9. $2.9 Billion: Losses Related to Email
Business email compromise claims continue to comprise a large part of the overall losses related to cyber insurance. In 2023, compromised email losses totaled $2.9 billion for the insurance industry.
10. 59%: Businesses That Don’t Use Security Training
Surprisingly, despite cybercrimes becoming more prevalent, 59% of all businesses do not have any cybersecurity awareness training. Training is an important part of preventing cybercrime losses. Many small business insurance companies offer free training and courses for their policyholders because they understand the importance of being prepared.
11. $16,000: Ransoms Paid
Small businesses paid out $16,000 last year to hackers in ransomware situations. However, paying the money didn’t always lead to the results that small business owners expected. 50% of owners who paid the ransom still did not receive their data back, and 27% of those who paid the ransom suffered another cyberattack. If that isn’t bad enough, 27% of ransomware attackers requested more money from those who paid!
12. 41%: Cyber Insurance Attack Victims
In the past year, 41% of small businesses have experienced a cyberattack. These attacks can come in many ways, although phishing remains the most common point of entry for hackers. This, of course, highlights the need for repetitive training on best workplace practices regarding IT security. Thankfully, 53% of small businesses have a cyber insurance policy.
13. $8,300: Average Cost of Cyberattack
The average cost of a cyberattack has decreased from $10,000 to $8,300. While a decrease is always good, it highlights the need for insurance. $8,300 is still a lot to pay out of pocket, and that doesn’t include the expertise the insurance company brings with trained and experienced employees who can help your business appropriately respond to cyberattacks.
14. Twice as Many: Software Supply Chain Attacks in 2023
Despite the increased awareness, attacks continue to outpace the previous year. 2023 saw twice as many software supply chain attacks as the previous three years combined. These attacks cost the US $45.8 billion.
15. Burglary and Theft: The Most Common Claims
According to a recent study by Next Insurance, burglary and theft are the most common types of small business insurance claims. These are followed by fire and water damage. Commercial property insurance is the type of policy you need to help handle the cost of fire or theft.
16. $34 Billion: Underwriting Losses
Natural disasters continue to be a source of extreme loss for insurance companies. In the first half of 2023, insurers had $34 billion in natural disasters. This number is unusual because it wasn’t from typical large storms like hurricanes but almost entirely from convective storms.
17. 5,000-plus: Fatal Workplace Injuries
There were 5,283 fatal workplace injuries in 2023, a decrease of 8.4% from 2022. In 2022, a worker died every 99 minutes, and in 2022, the number shortened to a workplace fatality every 96 minutes. This highlights the importance of maintaining a safe workplace and carrying workers’ compensation insurance.
5 Personal Lines Claims Statistics
Insurance is important for your business and all aspects of your life. These statistics show how important insurance is for your home and car.
1. 97.8%: Homeowners Claims Are Property Damage
Homeowners claims are overwhelmingly filed for property damage. This includes 0.7% of the claims for theft. Only 2.1% of claims filed were for liability. If you have a home-based business, your homeowners liability is likely to have either insufficient coverage or no coverage at all. For that, you would want a home-based business insurance policy.
2. $83,991: Average Cost of Most Expensive Homeowners Claim
According to the above report, fire and lightning were the most expensive homeowners claims ($83,991). Liability claims were the second most expensive, with a bodily injury liability claim averaging $31,690.
While there are steps you can and should take to reduce the likelihood of a claim, completely avoiding a fire or lightning strike or even a visitor tripping and falling is impossible. The costs of the loss again highlight the importance of maintaining an active policy.
3. $2,437: Average Cost of Homeowners Insurance in Florida
Florida is the most expensive state for homeowners insurance, with an average price for homeowners of $2,437. Compare that with Connecticut in 10th, which has an average cost of $1,651.
4. 10-year High: Auto Claims Cost More Year Over Year
When you look at the average cost of auto claims, the cost continues to grow and is currently at a 10-year high. The average cost of a bodily injury claim is $26,501. In 2023, the average cost of a collision claim was $5,470. In all categories of coverage, the average cost of a claim has been high for the past 10 years.
5. New York: Most Expensive Auto Insurance
In 2023, New York was the most expensive state for auto insurance, with an average cost of $1,511.04. The least expensive state was North Dakota, with an average cost of $691.50. The higher cost reflects local laws regarding liability, litigation, and labor costs for repairs.
6 Insurance Fraud Statistics
Insurance fraud is a serious problem in the US. Sometimes, it’s perpetrated by a criminal organization, and sometimes, it’s “soft” fraud, like lying on your application about your claims history. Either way, insurance fraud is costly for the industry. Nearly every state and the federal government devote resources to investigating insurance fraud.
1. $308.6 Billion: Insurance Fraud Committed Annually
It’s estimated that insurance fraud costs consumers and businesses approximately $308.6 billion annually. Someone has to pay the price for this. It’s estimated that this translates into between $400 and $700 a year in extra premiums for the average family.
2. $8,898: Acts of Arson
Of the above $308 billion, $45 billion is in P&C fraud, and $34 billion is workers’ compensation fraud. Of the $45 billion committed in P&C, $7.4 billion is related to auto theft claims. In 2020, nearly 9,000 automobiles were intentionally set on fire.
3. 22%: Policyholders Who Admit to Lying
Insurance fraud takes several forms. One form is material misrepresentation when applying for auto insurance, which can include lying about damage to your vehicle and claims history of the number of drivers living in the home to get a lower premium. 22% of auto policyholders admit to lying to their insurer about details that may hurt their premiums.
4. 89.5%: Offenders With No Prior Criminal History
Insurance fraud isn’t limited to organized crime. Out of 64,124 cases of healthcare fraud reported to the US Sentencing Commission in 2023, 89.5% of offenders had little or no prior criminal history.
5. 27 Months: Average Insurance Fraud Sentence
It can be easy to forget that fraud is a federal crime. If you commit it and are found guilty, you can end up going to prison. In 2023, individuals found guilty of healthcare fraud were sentenced to an average of 27 months or over two years in prison.
6. $1.2 Billion: Recovered From Fraud
The Medicaid Fraud Control Unit recovered $1.2 billion in 2023. This amount is almost triple the amount recovered in 2022! Much of the fraud for Medicaid comes from billing for services that are not provided or for patients not eligible for that type of care.
Frequently Asked Questions (FAQs)
Since 2006, most commercial policies have excluded viruses and bacteria, meaning there is no coverage for COVID-19-related losses. This is an ongoing issue—insurers are arguing that covering losses related to a pandemic would bankrupt them, and a program like TRIA needs to be established.
The top two spots remain unchanged for the last few years. By revenue, the top insurance company continues to be Berkshire Hathaway. The second largest is Ping An Insurance, a life insurance company.
Measured by direct written premiums in 2023, State Farm is the largest personal auto insurer. Berkshire Hathaway and Progressive Corp. are second and third, respectively.
Using the measurement of direct written premiums, Chubb Ltd. is the largest US insurer for commercial lines in 2023. Travelers Companies Inc. and Liberty Mutual follow it.
Bottom Line
These key business insurance statistics show the importance—and cost—of insurance. For its contribution to the economy, insurance is an important industry on the local, national, and global levels. While premiums are increasing, the cost of claims also continues to rise, and the cost of not having insurance is too great to leave to chance.
