Property & Casualty Insurance Carriers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 2,400 property and casualty insurance carriers in the US underwrite insurance policies that protect policy holders against losses that may occur as a result of property damage or liability. Major types of policies include vehicle property and liability; property and liability; and general liability. Other types of policies sold include health, life, and accident insurance. Large firms may offer reinsurance policies, which limit the amount insurers can lose.

Uncertainty Related to Risk and Losses

Success in the property and casualty insurance business is dependent on a firm’s ability to underwrite and price risk accurately and estimate losses.

Natural Disasters and Other Catastrophes

Damage and destruction due to natural disasters and other catastrophes expose property and casualty insurers to the financial burden of covering massive losses.

Industry size & Structure

The average property and casualty insurance carrier employs about 238 workers and generates $231 million annually.

    • The property and casualty insurance industry consists of about 2,400 firms that employ 571,000 workers and generate almost $555 billion annually.
    • The industry is highly concentrated; the top 50 companies account for about 82% of industry revenue.
    • Large firms include State Farm, Berkshire Hathaway, and Liberty Mutual.
                                Industry Forecast
                                Property & Casualty Insurance Carriers Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Nov 12, 2022 - Industry Is An Easy Fraud Target
                                • Insurance fraud can cost up to $309 billion a year, according to the Coalition Against Insurance Fraud (CAIF). Fraud comes in many forms, such as misrepresenting facts on an insurance policy to receive a lower premium, exaggerating an injury in the hopes of gaining additional benefits, and large-scale organized fraud whereby organized international criminal groups and terrorist cells launch highly detailed campaigns targeting specific insurance carriers. CAIF cites the insurance system's gaps in how claims are processed, which make it a very easy target, as a key cause of the high cost.
                                • The Ohio Supreme Court has ruled that an insurer has no duty to defend a drug distributor against lawsuits filed by cities and counties which allege that it failed to take proper steps to prevent abuse of prescription opioids. Experts say that the decision adds to a growing divergence among the courts on the question of whether insurers have a duty to defend drug distributors accused of contributing to an epidemic of opioid overdoses. The decision may have national implications, as the outcome of this case may be cited as precedent in cases brought in other states. The high court said that, because the lawsuits filed against Masters Pharmaceutical seek to recover for economic damages, not bodily injuries, there is no coverage by a commercial general liability policy which said that “damages because of bodily injury” will be covered.
                                • Dissatisfaction with the claims experience is a key reason that customers may switch insurers according to the “Why AI in Insurance Claims and Underwriting?” report. The report is based on surveys of more than 6,700 policyholders across 25 countries; more than 120 claims executives in 12 countries; and more than 900 US-based underwriters. Nearly one-third (30%) of dissatisfied claimants said they had switched carriers in the past two years, and another 47% said they were considering doing so. The report states that artificial intelligence technologies could improve the claims process: Four in five (79%) of the claims executives surveyed said they believe that automation, AI and data analytics based on machine learning can bring value across the entire claims value chain — from flagging fraudulent claims, to damage assessment and loss estimation, reserving, adjusting, processing optimization, and subrogation.
                                • Problems with the transition to digital services are contributing to consumers’ dissatisfaction with their insurance companies, while consumer adoption of the new technology remains “stubbornly low” in the property and casualty (P&C) field, according to the J.D. Power 2022 U.S. Property Claims Satisfaction Study. “Slower cycle times and growing pains associated with transitioning to digital servicing channels caused overall satisfaction scores to decline to a five-year low,” the study reports. A key cause behind consumers’ dissatisfaction with digital claims processes is the perceived inadequacy of photo estimating tools. Greater complexity in the claims process contributed to a drop in nearly every insurer’s scores, J.D. Power said. Overall customer satisfaction with homeowner insurance property claims fell to 871 on its 1,000-point scale, a five-year low. Only 11% of customers fully utilized digital channels for all major steps of the claim process.
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