International
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PREMIUMS
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WORLD LIFE AND NONLIFE INSURANCE IN 2007
Outside the United States, the insurance industry is divided into life and nonlife or general insurance rather than life/health and property/casualty.
In 2007 world insurance premium volume, for both sectors combined, totaled $4.06 trillion, up 10.5 percent from $3.67 trillion in 2006, according to Swiss Re. On an inflation-adjusted basis, total insurance premiums grew fastest in Latin America and the Caribbean, up 9.6 percent, followed by Asia, up 4.5 percent; Oceania (Australia, New Zealand and other islands), up 3.9 percent; Europe, up 3.4 percent; Africa, up 2.8 percent; and North America, up 2.1 percent. Inflation-adjusted premiums grew 11.8 percent in emerging markets and 2.5 percent in industrialized countries.
In 2007 life and nonlife insurance premiums (excluding cross-border business) accounted for 15.7 percent of gross domestic product (GDP) in both Taiwan and the United Kingdom, the highest share in the Swiss Re study, followed by 15.3 percent in South Africa. Premiums represented 8.9 percent of GDP in the United States.
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TOP TEN COUNTRIES BY LIFE AND NONLIFE DIRECT PREMIUMS WRITTEN, 2007 (1)
(U.S. $ millions)
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Total premiums |
Rank |
Country |
Life premiums (2) |
Nonlife premiums |
Amount |
Percent change from prior year |
Percent of total world premiums |
| 1 | United States (3) | $578,357 | $651,311 | $1,229,668 | 4.69% | 30.28% |
| 2 | United Kingdom | 349,740 | 113,946 | 463,686 | 28.16 | 11.42 |
| 3 | Japan (4) | 330,651 | 94,182 | 424,832 | -3.31 | 10.46 |
| 4 | France | 186,993 | 81,907 | 268,900 | 7.47 | 6.62 |
| 5 | Germany | 102,419 | 120,407 | 222,825 | 10.09 | 5.49 |
| 6 | Italy | 88,215 | 54,112 | 142,328 | 1.27 | 3.50 |
| 7 | South Korea (4) | 81,298 | 35,692 | 116,990 | 16.28 | 2.88 |
| 8 | Netherlands | 35,998 | 66,834 | 102,831 | 11.98 | 2.53 |
| 9 | Canada (5) | 45,593 | 54,805 | 100,398 | 14.74 | 2.47 |
| 10 | PR China | 58,677 | 33,810 | 92,487 | 30.75 | 2.28 |
(1) Before reinsurance transactions.
(2) Includes accident and health insurance.
(3) Nonlife premiums include state funds; life premiums include an estimate of group pension business.
(4) April 1, 2007-March 31, 2008.
(5) Life business expressed in net premiums.
Source: Swiss Re, sigma, No. 3/2008. |
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Swiss Re’s 2007 world insurance study is based on direct premium data from 147 countries, including 88 countries with premium volume of at least $407 million in 2007. Study findings indicate that premiums increased by 3.3 percent in 2007, adjusted for inflation. Life insurance premiums increased by 5.4 percent, accelerating in industrialized economies except for Japan and continental Europe. Sales of retirement and other wealth accumulation products spurred growth in industrialized nations while strong economic performance fueled growth in the life sector in emerging markets. Nonlife premiums grew 0.7 percent, declining slightly in industrialized nations but up 10.2 percent in emerging countries.
In the United States, the world’s largest life insurance market, growth in the life sector resulted from robust sales of life insurance products and annuities, due to an increased focus on retirement and estate planning. U.S. nonlife premiums fell 1.3 percent, with declines in all lines but property and marine. For 2008 Swiss Re expects global growth in life premiums to moderate as capital and stock market turmoil dampen demand. Nonlife premiums are expected to stay flat and combined ratios are expected to continue to deteriorate, due to pressures on rates and sluggish premium growth.
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WORLD LIFE AND NONLIFE INSURANCE PREMIUMS, 2007
Source: Swiss Re, sigma, No. 3/2008.
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WORLD LIFE AND NONLIFE INSURANCE PREMIUMS, 2005-2007 (1)
(Direct premiums written, U.S. $ millions)
Year |
Life |
Nonlife (2) |
Total |
| 2005 | $2,003,557 | $1,442,258 | $3,445,816 |
| 2006 | 2,125,791 | 1,549,100 | 3,674,892 |
| 2007 | 2,393,089 | 1,667,780 | 4,060,870 |
(1) Before reinsurance transactions.
(2) Includes accident and health insurance.
Source: Swiss Re, sigma database. |
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REINSURANCE
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Each year the Reinsurance Association of America provides an overview of the countries from which U.S. insurance companies obtain reinsurance, i.e., the countries to which they have ceded, or transferred, some of their risk. The analysis includes premiums that a U.S. insurance company cedes to “alien,” i.e., foreign, reinsurance companies that are not part of the insurer’s own corporate group (“unaffiliated alien reinsurers” in the chart below), as well as business ceded to overseas reinsurers that are part of the insurer’s corporate family (“affiliated alien reinsurers” in the chart below).
Foreign reinsurers’ share of the U.S. market increased from 53.1 percent in 2006 to 56.3 percent in 2007, based on premiums that U.S. insurers ceded to foreign-based reinsurers not part of their own corporate group. However, there are a number of U.S. based reinsurers that are owned by foreign companies. If the ultimate parents of these reinsurance companies are taken into account, foreign (or foreign-owned) reinsurance companies accounted for 83.4 percent of the market in 2007, down from 84.5 percent in 2006.
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U.S. REINSURANCE PREMIUMS CEDED TO UNAFFILIATED AND AFFILIATED
ALIEN REINSURERS BY COUNTRY, 2005-2007 (1)
($ millions)
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Unaffiliated alien reinsurers |
Affiliated alien reinsurers |
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Rank |
Country |
2005 |
2006 |
2007 |
2005 |
2006 |
2007 |
2007 total |
| 1 | Bermuda | $8,908 | $8,982 | $11,102 | $18,590 | $18,474 | $19,371 | $30,473 |
| 2 | Switzerland | 950 | 797 | 857 | 7,664 | 7,991 | 8,942 | 9,799 |
| 3 | United Kingdom | 4,827 | 4,630 | 4,578 | 252 | 346 | 777 | 5,355 |
| 4 | Germany | 2,529 | 2,582 | 2,569 | 9,401 | 2,005 | 1,463 | 4,032 |
| 5 | Cayman Islands | 1,780 | 1,806 | 2,023 | 646 | 435 | 409 | 2,432 |
| 6 | Barbados | 837 | 652 | 495 | 917 | 965 | 1,212 | 1,707 |
| 7 | France | 600 | 352 | 424 | 293 | 338 | 357 | 781 |
| 8 | Canada | 211 | 256 | 326 | 173 | 171 | 209 | 535 |
| 9 | Turks and Caicos | 382 | 398 | 481 | NA | NA | NA | 481 |
| 10 | Sweden | NA | NA | NA | 90 | 518 | 427 | 427 |
| 11 | Ireland | 788 | 532 | 419 | NA | NA | NA | 419 |
| 12 | Japan | NA | NA | NA | 222 | 220 | 192 | 192 |
| | Total, countries shown | 21,812 | 20,987 | 23,274 | 38,248 | 31,463 | 33,359 | 56,633 |
| | Total | $23,246 | $22,214 | $24,594 | $38,816 | $32,470 | $33,786 | $58,380 |
(1) Ranked by 2007 total reinsurance premiums.
NA=Data not available.
Source: Reinsurance Association of America. |
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TOP TEN GLOBAL INSURANCE COMPANIES
BY REVENUES, 2007 (1)
($ millions)
Rank |
Company |
Revenues (2) |
Country |
Industry |
| 1 | AXA | $162,762 | France | Life/health |
| 2 | Allianz | 140,618 | Germany | Property/casualty |
| 3 | Berkshire Hathaway | 118,245 | U.S. | Property/casualty |
| 4 | Assicurazioni Generali | 113,813 | Italy | Life/health |
| 5 | American International Group (AIG) (3) | 110,064 | U.S. | Property/casualty |
| 6 | Aviva | 81,317 | U.K. | Life/health |
| 7 | Prudential | 66,358 | U.K. | Life/health |
| 8 | Munich Re Group | 64,774 | Germany | Property/casualty |
| 9 | Aegon | 62,383 | Netherlands | Life/health |
| 10 | State Farm Insurance Cos. | 61,612 | U.S. | Property/casualty |
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
(3) In 2008 AIG ceded 79.9 percent of its ownership to the federal government in exchange for an $85 billion loan.
Source: Fortune. |
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TOP TEN GLOBAL PROPERTY/CASUALTY INSURANCE COMPANIES
BY REVENUES, 2007 (1)
($ millions)
Rank |
Company |
Revenues (2) |
Country |
| 1 | Allianz | $140,618 | Germany |
| 2 | Berkshire Hathaway | 118,245 | U.S. |
| 3 | American International Group (AIG) (3) | 110,064 | U.S. |
| 4 | Munich Re Group | 64,774 | Germany |
| 5 | State Farm Insurance Cos. | 61,612 | U.S. |
| 6 | Zurich Financial Services | 55,163 | Switzerland |
| 7 | Allstate | 36,769 | U.S. |
| 8 | Swiss Reinsurance | 35,730 | Switzerland |
| 9 | Millea Holdings | 32,487 | Japan |
| 10 | Travelers Cos. | 26,017 | U.S. |
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
(3) In 2008 AIG ceded 79.9 percent of its ownership to the federal government in exchange for an $85 billion loan.
Source: Fortune. |
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TOP TEN GLOBAL LIFE/HEALTH INSURANCE COMPANIES
BY REVENUES, 2007 (1)
($ millions)
Rank |
Company |
Revenues (2) |
Country |
| 1 | AXA | $162,762 | France |
| 2 | Assicurazioni Generali | 113,813 | Italy |
| 3 | Aviva | 81,317 | U.K. |
| 4 | Prudential | 66,358 | U.K. |
| 5 | Aegon | 62,383 | Netherlands |
| 6 | CNP Assurances | 59,071 | France |
| 7 | Nippon Life Insurance | 57,859 | Japan |
| 8 | MetLife | 53,150 | U.S. |
| 9 | China Life Insurance | 43,440 | China |
| 10 | Dai-ichi Mutual Life Insurance | 39,863 | Japan |
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
Source: Fortune. |
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TOP TEN GLOBAL REINSURERS
BY NET REINSURANCE PREMIUMS WRITTEN, 2007
($ millions)
Rank |
Company |
Net reinsurance premiums written |
Country |
| 1 | Munich Reinsurance Co. | $30,292.9 | Germany |
| 2 | Swiss Reinsurance Co. | 27,706.6 | Switzerland |
| 3 | Berkshire Hathaway Re | 17,398.0 | U.S. |
| 4 | Hannover Rueckversicherung AG | 10,630.0 | Germany |
| 5 | Lloyd's (1) | 8,362.9 | U.K. |
| 6 | SCOR SE | 7,871.7 | France |
| 7 | Reinsurance Group of America, Inc. | 4,906.5 | U.S. |
| 8 | Transatlantic Holdings Inc. | 3,952.9 | U.S. |
| 9 | Everest Reinsurance Co. | 3,919.4 | Bermuda |
| 10 | PartnerRe Ltd. | 3,757.1 | Bermuda |
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(1) Represents an aggregation of all syndicates participating at Lloyd’s.
Source: Standard & Poor's. |
| - In 2007 global reinsurance premiums written totaled $168.0 billion, up 9.8 percent from $153.1 billion in 2006, according to Standard & Poor's.
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TOP TEN GLOBAL INSURANCE BROKERS BY REVENUES, 2007
($ millions)
Rank |
Company |
Brokerage revenues (1) |
Country |
| 1 | Marsh & McLennan Cos. Inc. | $11,281.0 | U.S. |
| 2 | Aon Corp. (2) | 7,096.0 | U.S. |
| 3 | Willis Group Holdings Ltd. (3) | 2,463.0 | U.K. |
| 4 | Arthur J. Gallagher & Co. | 1,457.2 | U.S. |
| 5 | Wells Fargo Insurance Services Inc. | 1,282.1 | U.S. |
| 6 | Jardine Lloyd Thompson Group P.L.C. | 947.3 | U.K. |
| 7 | BB&T Insurance Services Inc. | 877.4 | U.S. |
| 8 | Hilb Rogal & Hobbs Co. (3) | 780.0 | U.S. |
| 9 | Brown & Brown Inc. | 757.6 | U.S. |
| 10 | Lockton Cos. L.L.C. | 728.2 (4) | U.S. |
(1) Gross revenues generated by insurance brokerage, consulting and related services.
(2) In 2008 Aon agreed to acquire Benfield.
(3) In 2008 Willis acquired Hilb Rogal & Hobbs Co.
(4) Fiscal year ending April 30.
Source: Business Insurance, July 21, 2008. |
| - Aon is the world's largest broker based on "pure placement." This includes insurance, reinsurance and wholesale brokerage revenues but excludes employee benefits, consulting and other income. In 2007 Aon's placement revenues were $5.75 billion, followed by Marsh & McLennan Cos. ($5.40 billion), Willis ($2.16 billion), Wells Fargo ($1.03 billion) and BB&T ($809.5 million).
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TOP TEN GLOBAL REINSURANCE BROKERS
BY REINSURANCE GROSS REVENUES, 2007 (1)
($000)
Rank |
Company |
Reinsurance gross revenues |
Country |
| 1 | Aon Re Global (2) | $975,000 | U.S. |
| 2 | Guy Carpenter & Co. L.L.C. | 901,000 | U.S. |
| 3 | Benfield Group Ltd. (2) | 679,078 (3) | U.K. |
| 4 | Willis Re | 606,200 | U.K. |
| 5 | Towers Perrin | 167,250 | U.S. |
| 6 | Cooper Gay (Holdings) Ltd. | 136,200 | U.K. |
| 7 | Jardine Lloyd Thompson Group P.L.C. | 124,124 (3) | U.K. |
| 8 | John B. Collins Associates Inc. | 70,300 | U.S. |
| 9 | BMS Group | 69,619 (3) | U.K. |
| 10 | UIB Holdings Ltd. | 39,990 (3) | U.K. |
(1) Includes all reinsurance revenue reported through holding and/or subsidiary companies.
(2) In 2008 Aon agreed to acquire Benfield.
(3) Fiscal year 2007.
Source: Business Insurance, October 27, 2008. |
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CROSS-BORDER SALES
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FOREIGN SALES BY U.S. INSURANCE COMPANIES
The chart below tracks the non-U.S. insurance sales of foreign companies that are affilates of U.S. firms.
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SALES OF INSURANCE OVERSEAS BY AFFILIATES OF
U.S. INSURANCE COMPANIES, 1998-2005 (1)
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Life |
Nonlife (2) |
Total |
Year |
Sales
($ millions) |
Percent change from prior year |
Sales
($ millions) |
Percent change from prior year |
Sales
($ millions) |
Percent change from prior year |
| 1998 | $20,727 | 7.9% | $43,137 | -1.2% | $63,864 | 1.6% |
| 1999 | 24,970 | 20.5 | 45,271 | 4.9 | 70,241 | 10.0 |
| 2000 | 33,140 | 32.7 | 50,743 | 12.1 | 83,883 | 19.4 |
| 2001 | 33,059 | -0.2 | 46,406 | -8.5 | 79,465 | -5.3 |
| 2002 | 40,930 | 23.8 | 51,908 | 11.9 | 92,838 | 16.8 |
| 2003 | 44,393 | 8.5 | 56,015 | 7.9 | 100,408 | 8.2 |
| 2004 | 48,084 | 8.3 | 59,490 | 6.3 | 107,624 | 7.2 |
| 2005 | 52,053 | 8.3 | NA | NA | NA | NA |
(1) Affiliates are majority-owned foreign affiliates of a U.S. company, defined as ones that are located in another country and are more than 50 percent owned by a U.S. multinational..
(2) Includes accident and health insurance.
NA=Data not available.
Source: U.S. Department of Commerce, Bureau of Economic Analysis, International Investment Division. |
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SALES OF INSURANCE IN THE UNITED STATES BY FOREIGN-OWNED COMPANIES
A foreign-owned insurance company is defined as one that is at least 50 percent owned or controlled by a foreign person or business group.
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SALES OF INSURANCE IN THE UNITED STATES BY FOREIGN-OWNED COMPANIES, 2002-2005 (1)
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Life |
Nonlife (2) |
Total |
Year |
Sales
($ millions) |
Percent change from prior year |
Sales
($ millions) |
Percent change from prior year |
Sales
($ millions) |
Percent change from prior year |
| 2002 | $44,917 | NA | $63,619 | NA | $108,536 | NA |
| 2003 | 43,869 | -2.3% | 68,324 | 7.4% | 112,193 | 3.4% |
| 2004 | 45,720 | 4.2 | 64,353 | -5.8 | 110,073 | -1.9 |
| 2005 | 48,953 | 7.1 | 61,626 | -4.2 | 110,579 | 0.5 |
(1) Foreign majority-owned companies. Due to reclassifications resulting from the 2002 benchmark survey, data prior to 2002 are not available.
(2) Includes accident and health insurance.
NA=Data not available.
Source: U.S. Department of Commerce, Bureau of Economic Analysis, International Investment Division. |
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CAPTIVES
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Over the years, a number of alternatives to traditional commercial insurance have emerged to respond to fluctuations in the marketplace. Captives—a special type of insurance company set up by a parent company, trade association or group of companies to insure the risks of its owner or owners—emerged during the 1980s, when businesses had trouble obtaining some types of commercial insurance coverage. Other alternative risk transfer (ART) arrangements include self insurance, risk retention groups and risk purchasing groups.
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LEADING CAPTIVE DOMICILES, 2006-2007
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Number of captives |
Rank |
Location |
2006 |
2007 |
| 1 | Bermuda | 989 | 958 |
| 2 | Cayman Islands | 740 | 765 |
| 3 | Vermont | 563 | 567 |
| 4 | British Virgin Islands | 400 (1) | 409 (1) |
| 5 | Guernsey | 381 | 368 |
| 6 | Barbados | 235 | 256 |
| 7 | Luxembourg | 208 | 210 |
| 8 | Turks and Caicos Islands | 169 (2) | 173 (1) |
| 9 | Hawaii | 160 | 163 |
| 10 | South Carolina | 146 | 158 |
| 11 | Isle of Man | 161 | 155 |
| 12 | Dublin | 154 (3) | 131 |
| 13 | Nevada | 95 | 115 |
| 14 | Arizona | 83 (3) | 108 |
| 15 | Utah | 30 | 92 |
| 16 | D.C. | 70 | 77 |
| 17 | Singapore | 60 | 62 |
| 18 | Switzerland | 48 | 48 |
| 19 | New York | 39 | 44 |
| 20 | Labuan | 26 (1) | 31 |
| | Total top 20 | 4,757 | 4,890 |
| Total worldwide | 4,951 | 5,119 |
(1) Business Insurance estimate.
(2) Excludes credit life insurers.
(3) Restated.
Source: Business Insurance, March 3, 2008. |
| - The number of captives worldwide increased from 3,361 in 1997 to 5,119 in 2007, according to Business Insurance.
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