Insurance is the lifeblood of any developed economy, as it enables individuals, businesses and even governments to transfer risk to further invest and grow. Simply put, without insurance, an economy cannot develop in a sustainable manner. However, few people are aware of the extraordinary impact the industry has on state, local and national economies. For example:
To explain the ways that both property/casualty and life insurance contribute to our economy far beyond their core function of helping to manage risk, the Insurance Information Institute has produced a website, A Firm Foundation: How Insurance Supports the Economy.
This publication shows the myriad ways in which insurance supports the economy. Each chart illustrates one or more elements. Together they tell a tale that is rarely told–that insurance helps provide the firm foundation for a functioning economy.
We hope that you will enjoy and utilize the information contained in A Firm Foundation. You can also count on the Insurance Information Institute to leverage this as well throughout the year as we continue to drive the public conversation about the key role of insurance in creating a safer, more stable world.
Sean Kevelighan
CEO
Insurance Information Institute
Careers And Employment The insurance industry is a major U.S. employer, providing some 2.6 million jobs that encompass a wide variety of careers, from human resource administrators to public relations managers to financial analysts. Some jobs, such as claims adjusters, actuaries and insurance underwriters, are unique to the insurance industry.
For information about the many career opportunities in the insurance industry, consult the Bureau of Labor Statistics’ Career Guide to Industries or insuremypath.org.
2013-2017
| Year | Annual payroll ( $ billions ) |
|---|---|
| 2012 | $215.3 |
| 2013 | 218.8 |
| 2014 | 233.7 |
| 2015 | 249.8 |
| 2016 | 255.3 |
There are three main insurance sectors. Property/casualty (P/C) consists mainly of auto, home and commercial insurance. Life/health (L/H) consists mainly of life insurance and annuity products. Most private health insurance is written by insurers whose main business is health insurance. However, L/H and P/C insurers also write this coverage. In 2016 P/C net premiumswritten rose by 2.6 percent, while L/H net premiums written fell by 6.0 percent.
2016 (1) (US$ billions)
Net Premiums Written, 2007-2016 ( $000 )
| Year | Property / Casualty (1) | Life / health (2) | Total |
|---|---|---|---|
| 2007 | $446,179,922 | $596,111,873 | $1,042,291,795 |
| 2008 | $440,318,983 | $607,250,216 | $1,047,569,199 |
| 2009 | $423,528,077 | $491,487,792 | $915,015,869 |
| 2010 | $425,878,773 | $560,494,920 | $986,373,693 |
| 2011 | $441,562,154 | $602,257,296 | $1,043,819,450 |
| 2012 | $460,686,182 | $623,238,450 | $1,083,924,632 |
| 2013 | $481,517,971 | $560,070,547 | $1,041,588,518 |
| 2014 | $502,842,475 | $644,480,928 | $1,147,323,403 |
| 2015 | $520,149,847 | $635,550,027 | $1,155,699,874 |
| 2016 | $533,685,406 | $597,650,170 | $1,131,335,576 |
Percent change,(2007-2016) |
19.6% | 0.3% | 8.5% |
The surplus lines market, a group of highly specialized insurers that includes Lloyd’s of London, exists to assume risks that licensed companies decline to insure or will only insure at a very high price, with many exclusions or with a very high deductible.
To be eligible to seek coverage in the surplus lines market, a diligent effort must have been made to place insurance with an admitted company, usually defined by a certain number of declinations, or rejections, by licensed insurers, typically three to five.
Many states provide an export list of risks that can be insured in the surplus lines market. This obviates the diligent search requirement.
The terms applied to the surplus lines market–nonadmitted, unlicensed and unauthorized–do not mean that surplus lines companies are barred from selling insurance in a state or are unregulated. They are just less regulated. Each state has surplus lines regulations, and each surplus lines company is overseen for solvency by its home state. More than half of the states maintain a list of eligible surplus lines companies and some a list of those that are not eligible to do business in that state.
Lloyd’s of London is a significant writer of surplus lines insurance, both for corporations and individuals. Lloyd’s members conduct their insurance business in syndicates, each of which is run by a managing agent. According to A.M. Best, in 2016 the Lloyd’s market represented 23 percent of the total surplus lines market share and wrote $9.6 billion in excess and surplus lines (E&S) premiums. The largest E&S lines for Lloyd’s are commercial property, general liability, cyber and professional indemnity.
By Direct Premiums Written, 2016 ($000)
| Rank | Group | Direct written premiums | Percent of total U.S. surplus lines market |
|---|---|---|---|
| 1 | Lloyd’s | $9,607,000 | 22.6% |
| 2 | American International Group (1) | 3,765,359 | 8.9 |
| 3 | Nationwide Group | 1,727,403 | 4.1 |
| 4 | W.R. Berkley Insurance Group | 1,724,012 | 4.1 |
| 5 | Chubb INA Group | 1,479,874 | 3.5 |
| 6 | Markel Corporation Group | 1,233,685 | 2.9 |
| 7 | Berkshire Hathaway Ins. Group | 1,183,762 | 2.8 |
| 8 | Zurich Financial Services NA Group | 1,163,854 | 2.7 |
| 9 | XL Catlin America Group | 1,124,186 | 2.6 |
| 10 | Fosun US Group | 870,585 | 2.1 |
| 11 | Alleghany Ins.Holdings Group | 761,190 | 1.8 |
| 12 | Fairfax Financial (USA) Group | 734, 786 | |
| 13 | Argo Group | 676,625 | 1.6 |
| 14 | Tokio Marine US PC Group | 639,859 | 1.5 |
| 15 | State National Group | 638,735 | 1.5 |
| 16 | AXIS Insurance Group | 625,012 | 1.5 |
| 17 | CNA Insurance Companies | 615,516 | 1.5 |
| 18 | QBE Americas Group | 613,359 | 1.4 |
| 19 | Great American P & C Ins. Group | 571,358 | 1.3 |
| 20 | Arch Insurance Group | 526,177 | 1.2 |
| 21 | Allied World Assurance Group | 515,243 | 1.2 |
| 22 | Endurance Specialty Group | 489,253 | 1.2 |
| 23 | Aspen US Insurance Group | 471,821 | 1.1 |
| 24 | Starr International Group | 442,288 | 1.0 |
| 25 | Swiss Reinsurance Group | 394,328 | 0.9 |
| Total, top 25 | $32,595,260 | 76.8% | |
| Total U.S. surplus lines market | $42,425,277 | 100% |
As employers, taxpayers and investors, insurance companies play a major role in the U.S. economy, contributing $507.7 billion, or 2.7 percent, of U.S. gross domestic product in 2016. The following charts identify some of the leading players in this vital sector.
By Direct Premiums Written, 2016( $000 )
| Rank | Group / company | Direct premiums written (1) | Market share (2) |
|---|---|---|---|
| 1 | State Farm Mutual Automobile Insurance | $62,189,311 | 10.2% |
| 2 | Berkshire Hathaway Inc. | 33,300,439 | 5.4 |
| 3 | Liberty Mutual | 32,217,215 | 5.3 |
| 4 | Allstate Group | 30,875,771 | 5.0 |
| 5 | Progressive Corp. | 23,975,690 | 3.9 |
| 6 | Travelers Companies Inc. | 23,918,048 | 3.9 |
| 7 | Chubb Ltd. | 20,786,847 | 3.4 |
| 8 | Nationwide Mutual Group | 19,756,093 | 3.2 |
| 9 | Farmers Insurance Group of Companies | 19,677,601 | 3.2 |
| 10 | USAA Insrance Group | 18,273,675 | 3.0 |
By Direct Premiums Written, 2016( $000 )
| Rank | Group / Company | Direct premiums written (1) | Market share (2) |
|---|---|---|---|
| 1 | MetLife Inc. | $95,110,802 | 15.2% |
| 2 | Prudential Financial Inc. | 45,902,327 | 7.3 |
| 3 | New York Life Insurance Group | 30,922,462 | 4.9 |
| 4 | Principal Financial Group Inc. | 28,186,098 | 4.5 |
| 5 | Massachusetts Mutual Life Insurance Co. | 23,458,883 | 3.8 |
| 6 | American International Group | 22,463,202 | 3.6 |
| 7 | Jackson National Life Group | 22,132,278 | 3.5 |
| 8 | AXA | 21,920,627 | 3.5 |
| 9 | AEGON | 21,068,180 | 3.4 |
| 10 | Lincoln National Corp. | 19,441,555 | 3.1 |
By Direct Premiums Written, 2016 ( $000 )
| Rank | Group / company | Direct premiums written (1) | Market share (2) |
|---|---|---|---|
| 1 | State Farm Mutual Automobile Insurance | $17,610,240 | 19.2% |
| 2 | Allstate Corp. | 7,903,530 | 8.6 |
| 3 | Liberty Mutual | 6,228,877 | 6.8 |
| 4 | Farmers Insurance Group of Comapnies (3) | 5,515,277 | 6.0 |
| 5 | USAA Insurance Group | 5,341,021 | 5.8 |
| 6 | Travelers Companies Inc. | 3,387,144 | 3.7 |
| 7 | National Mutual Group | 3,299,236 | 3.6 |
| 8 | American Family Mutual | 2,855,835 | 3.1 |
| 9 | Chubb Ltd. | 2,697,841 | 3.0 |
| 10 | Erie Insurance Group | 1,538,085 | 1.7 |
By Direct Premiums Written, 2016 ($000)
| Rank | Group / company | Direct premiums written (1) | Market share (2) |
|---|---|---|---|
| 1 | State Farm Mutual Automobile Insurance | $39,194,660 | 18.3% |
| 2 | Berkshire Hathaway Inc. | 25,531,762 | 11.9 |
| 3 | Allstate Corp. | 20,813,858 | 9.7 |
| 4 | Progressive Corp. | 19,364,834 | 9.1 |
| 5 | USAA Insurance Group | 11,691,051 | 5.4 |
| 6 | Liberty Mutual | 10,774,426 | 5.0 |
| 7 | Farmers Insurance Group of Companies(3) | 10,304,622 | 4.8 |
| 8 | National Mutual Group | 7,640,558 | 3.6 |
| 9 | American Family Insurance Group | 4,005,549 | 1.9 |
| 10 | Travelers companies Inc. | 3,896,786 | 1.8 |
By Direct Premiums Written, 2016 ($000)
| Rank | Group / company | Direct premiums written (1) | Market share (2) |
|---|---|---|---|
| 1 | Progressive Corp | $2,625,929 | 7.9% |
| 2 | Travelers Companies Inc. | 2,124,182 | 6.4 |
| 3 | National Mutual Group | 1,735,614 | 5.2 |
| 4 | Zurich Insurance Group(3) | 1,624,621 | 4.9 |
| 5 | Liberty Mutual | 1,604,461 | 4.8 |
| 6 | Old Republic International Corp. | 1,123,042 | 3.4 |
| 7 | Berkshire Hathaway Inc. | 951,775 | 2.9 |
| 8 | American International Group (AIG) | 867,567 | 2.6 |
| 9 | Auto-Owners Insurance Co. | 739,495 | 2.2 |
| 10 | Chubb Ltd. | 695,210 | 2.1 |
By Direct Premiums Written, 2016 ($000)
| Rank | Group / company | Direct premiums written (1) | Market share (2) |
|---|---|---|---|
| 1 | Chubb Ltd. | $16,528,891 | 5.6% |
| 2 | Travelers Companies Inc. | 16,463,566 | 5.6 |
| 3 | Liberty Mutual | 15,056,251 | 5.1 |
| 4 | American International Group (AIG) | 13,144,961 | 4.4 |
| 5 | Zurich Insurance Group (3) | 12,554,597 | 4.2 |
| 6 | CNA Financial Corp. | 9,763,122 | 3.3 |
| 7 | Nationwide Mutual Group | 8,335,275 | 2.8 |
| 8 | Hartford Financial Services | 7,679,737 | 2.6 |
| 9 | Berkshire Hathaway Inc. | 7,650,236 | 2.6 |
| 10 | Tokio Marine Group | 6,256,196 | 2.1 |
By Direct Premiums Written, 2016 ($000)
| Rank | Group / company | Direct premiums written (1) | Market share (2) |
|---|---|---|---|
| 1 | Travelers Companies Inc. | $4,427,997 | 7.6% |
| 2 | Hartford Financial Services | 3,328,753 | 5.7 |
| 3 | AmTrust Financial Services | 3,110,623 | 5.4 |
| 4 | Zurich Insurance Group (3) | 2,853,537 | 4.9 |
| 5 | Berkshire Hathaway Inc. | 2,669,994 | 4.6 |
| 6 | Chubb Ltd. | 2,490,183 | 4.3 |
| 7 | State Ins Fund Workers’Comp (NY) | 2,437,552 | 4.2 |
| 8 | Liberty MHC Inc. | 2,404,050 | 4.2 |
| 9 | American International Group | 1,864,297 | 3.2 |
| 10 | State Compensation Ins Fund (CA) | 1,612,050 | 2.8 |
By Direct Premiums Written, 2016 ($000)
| Rank | Group / company | Direct premiums written (1) | Market share (2) |
|---|---|---|---|
| 1 | California Earthquake Authority | $621,549 | 21.8% |
| 2 | State Farm Mutual Automobile Insurance | 250,285 | 8.8 |
| 3 | Zurich Insurance Group (3) | 176,528 | 6.2 |
| 4 | Chubb Ltd. | 157,716 | 5.5 |
| 5 | American International Group(AIG) | 143,347 | 5.0 |
| 6 | Travelers Companies Inc. | 128,097 | 4.5 |
| 7 | GeoVera Insurance Group | 110,298 | 3.9 |
| 8 | Liberty Mutual | 77,832 | 2.7 |
| 9 | Swiss Re Ltd. | 67,335 | 2.4 |
| 10 | Berkshire Hathaway Inc. | 63,603 | 2.2 |
By Direct Premiums Written, 2016 ($000)
| Rank | Group / company | Direct premiums written (1) | Market share (2) |
|---|---|---|---|
| 1 | UnitedHealth Group Inc. | $79,472,411 | 12.5% |
| 2 | Anthem Inc. | 58,748,993 | 9.2 |
| 3 | Humana Inc. | 53,601,025 | 8.4 |
| 4 | HealthCare Services Corp. | 32,157,585 | 5.0 |
| 5 | Aetna Inc. | 24,414,237 | 3.8 |
| 6 | Centene Corp. | 24,070,523 | 3.8 |
| 7 | Independence Health Group Inc. | 17,013,754 | 2.7 |
| 8 | Kaiser Foundation Health Plan Inc. | 16,166,834 | 2.5 |
| 9 | Molina Healthcare Inc. | 15,317,439 | 2.4 |
| 10 | WellCare Health Plan Inc. | 13,451,891 | 2.1 |
The insurance industry is a major source of tax revenue on the state and federal level. In 2016 property/casualty insurers and life insurers incurred federal and foreign taxes were about $23.6 billion dollars. Insurance companies, including life/health and property/casualty companies, paid $20.5 billion in premium taxes to the 50 states in 2016. On a per capita basis, this works out to $63 for every person living in the United States.
2012-2016 ($000)
| Year | Property / Casualty | Life | Total |
|---|---|---|---|
| 2012 | 6,257,395 | $9,866,018 | 16,123,413 |
| 2013 | 12,038,618 | 8,554,055 | 20,592,673 |
| 2014 | 10,318,140 | 10,106,154 | 20,424,293 |
| 2015 | 10,188,465 | 10,566,567 | 20,755,031 |
| 2016 | 7,315,023 | 16,279,121 | 23,594,144 |
The insurance industry employs 2.8 million people, accounting for about 27 percent of the workforce in the U.S. financial activities sector, according to the Current Population Survey from the U.S. Department of Labor.
| Industry | Employees ( 000) |
|---|---|
| Total, All Industries | 151,136 |
| Agriculture, forestry, fishing,and hunting | 2,460 |
| Mining, quarrying, and oil and gas extraction | 792 |
| Construction | 10,328 |
| Manufacturing | 15,408 |
| Wholesale and retail trade | 20,218 |
| Transportation and utilities | 8,012 |
| Information | 2,855 |
| Financial activities | 10,404 |
| Insurance carriers and related activities | 2,794 |
| Professional and business services | 18,325 |
| Education and health services | 34,263 |
| Leisure and hospitality | 14,193 |
| Other services | 7,320 |
| Public administration | 6,857 |
Property/casualty (P/C) and life/health insurance companies contribute to our economy far beyond their core function of helping to manage risk. Insurers contributed $507.7 billion, or 2.7 percent, to the nation’s gross domestic product in 2016. The taxes they pay include special levies on insurance premiums, which amounted to $20.5 billion in 2016, or 2.2 percent of all taxes collected by the states.
Insurance companies invested $770.8 billion in state and local municipal bonds and loans in 2016, helping to fund the building of roads, schools and other public projects. They provide businesses with capital for research, expansions and other ventures through their holdings in stocks and bonds, a figure that totaled $4.3 trillion in 2016. The sector is also a large employer, providing some 2.6 million jobs, or 2.1 percent of U.S. employment in 2016.
The industry is also a major contributor to charitable causes. The Insurance Industry Charitable Foundation (IICF) and McKinsey and Co. have said that the insurance industry increased charitable giving by an average of 15 percent per year since 2011 for a total of $575 million in 2015. By mid-2017, the industry had contributed more than $25.3 million in local community grants and more than 218,000 volunteer hours to hundreds of community nonprofit organizations.
Each year in October the Insurance Industry Charitable Foundation promotes a Week of Giving, during which insurance industry employees volunteer at community programs throughout the country. For information on the insurance industry’s contribution to community development see Impact, the Insurance Information Institute’s online resource highlighting the insurance industry’s contributions to community development. Information on corporate giving (including contributions by insurance foundations) is also available from the Foundation Center.
Gross domestic product (GDP) is the total value of all final goods and services produced in the economy. The GDP growth rate is the primary indicator of the state of the economy.
| Year | Total GDP | GDP | Percent of total GDP |
|---|---|---|---|
| 2012 | $16,155.3 billions | $402.6 billions | 2.5% |
| 2013 | 16,691.5 | 406.2 | 2.4 |
| 2014 | 17,393.1 | 465.7 | 2.7 |
| 2015 | 18,036.6 | 489.3 | 2.7 |
| 2016 | 18,569.1 | 507.7 (1) | 2.7 |
