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40 Eye Opening Insurance Demographics

Insurance is what we all need to protect our financial well-being in a number of areas. From health care to automobiles, just about everyone has at least one insurance policy. This makes the insurance industry one of the most valuable in the world today.

The U.S. insurance industry’s net premiums written totaled $1.1 trillion in 2014, with premiums recorded by life/health insurers accounting for 56% and premiums by property/casualty insurers accounting for 44% of premiums.

Could we live without insurance? Of course we could. Insurance policies help us to maintain our quality of life and be in compliance with legal requirements. This way, even if the unthinkable should happen, we all have a chance to dust ourselves off and get back on our feet again.

A Picture of the Insurance Industry Today

  • Insurance companies paid $18.1 billion in premium taxes in 2014, or $57 for every person living in the United States.
  • $15.5 billion in property losses related to catastrophes in 2014, compared with $12.9 billion in 2013.
  • Total cash and invested assets in property/casualty and life/health in 2014 equaled $5.1 trillion, with 61% of those assets in the form of bonds.
  • There were 6,118 insurance companies in 2014 in the United States, which employed 2.5 million people. 60% of employees worked directly for insurance companies that write policies.
  • State Farm accounted for 10% of the property/casualty insurance polices underwritten in the US in 2014.
  • MetLife accounted for 17% of the life insurance/annuity premiums underwritten in 2014.
  • The number of net premiums written per year has increased by at least 3% annually since 2011.
  • In 2010, insurance carriers and related activities totaled 2.8% of the U.S. gross domestic product.
  • 37 insurance companies are listed on the 2013 FORTUNE 500 annual ranking of America’s largest corporations.
  • Berkshire Hathaway is the largest global property/casualty insurer in the world with revenues of over $140 billion.

There are a number of ways that we can insure ourselves against loss, but those specific policies fit into 4 basic categories. With trillions in value being invested every year, it is clear that we are spending a lot to make sure that we can be covered, but in reality very few claims are actually processed compared to the premiums that we are paying on a regular basis. With $1.1 trillion in premiums paid, less than 10% of that figure was paid back in losses or payouts. Even taking out the salaries of those working to write the policies, there’s a lot of profit in there. For example: property/casualty insurers, after taxes, had a net income of $55 billion in 2014.

Careers and Employment in the Insurance Industry

  • At 2.5 million employees, the insurance industry is one of the major employer sin the United States.
  • Women have comprised about 61% of the insurance industry workforce in each year from 2006 to 2015.
  • In 2015, there were 1.6 million women employed in the insurance sector, accounting for 59.4 percent of the 2.7 million workers in the insurance industry.
  • The percentage of women in selected insurance occupations ranges from 51% of insurance sales agents to 77% of insurance claims and policy clerks in 2015.
  • Health insurance employment positions rose 4.9% in January 2016 compared to numbers from the year before.

The insurance industry is one of the few industries in the US which actually see equal opportunities for women. Although women make up a majority of the lower paid employees in the industry, the higher paying sales and underwriting positions are divided equally and the wage gap is extremely minimal since many positions are based on either standard commissions or a standard salary. With most years seeing high levels of profitability for the industry, this creates a stable career opportunity for women that many other industries are unable to provide.

Life Insurance As a Demographic

  • 83 million employer sponsored retirement plans are offered to US workers and their families every year.
  • 80% of full-time employees in the US have access to a workplace retirement plan, but 20% of workers with access choose not to participate.
  • The life insurance industry invests over $5.5 trillion into the US economy.
  • 144 million families have at least one life insurance product.
  • Life insurers pay out $1.5 billion ever day.
  • $286 billion of commercial mortgages in the US are financed directly by life insurance companies.
  • Out of every $6 put into long-term savings, $1 is spent on a permanent life insurance product or a retirement annuity.

Life insurance is one of those things that you never think you’ll need until you actually need it. Because of this, many US families are emphasizing an investment into this area of insurance demographics to protect themselves or their loved ones from something unexpected. The amount of returns on a daily basis are impressive, but consider the amount that gets invested into the economy in return. Over $5.5 trillion goes into the economy, but $500 billion goes to payouts.

Future Issues The Insurance Industry Faces

  • In 2015, there were 781 reported data breaches. There were 783 reported breaches in 2014. This has resulted in a 97.5% increase of exposed personal records.
  • Despite the high number of exposures, it is the 222.5 million personal records exposed in 2009 that still holds the industry record.
  • Cyber insurance premiums written could increase up to 3x current levels by 2020, to a total amount of $7.5 billion.
  • Demand for temporary workers has increased 2-3x faster than for regular workers in recent years.
  • 19% of the US population has already engaged in the on-demand or sharing economy with at least one transaction.
  • 7% of people are providers in what is referred to as the “gig” economy, but may not have any insurance to protect them against a potential legal issue. Another 51% of people say they could see themselves becoming a provider within the next 24 months.
  • 61% of people who offer services are men and 55% belong to a racial or ethnic minority in their region.
  • More than half of people who work in temporary self-employment situations or as a contractor are in the 18-34 age demographic.

As the economy evolves, the insurance demographics must also evolve in order to maintain the traditional protections they have seen in the past. As more people look toward self-employment or becoming an “offerer” in the sharing economy, they expose themselves to much more risk than they likely realize. If you’re a sole proprietor who is self-employed and someone decides to sue you for any reason, it isn’t just your business that will be at risk. All of your personal assets are going to be at stake. That is why it is so important for these new workers in this new economy, one that could be a future driver of success on a global scale, to consider how they fit into the insurance demographics today.

Homeowners and Renters in the Insurance Demographics

  • In 2014, 5.3% of insured homes had a claim on their policy.
  • Property damage, including theft, accounts for 97% of all homeowners insurance claims.
  • Over the past 10 years, about 50% of all homeowners say they have prepared an inventory of their possessions to help document losses for their insurers. Homeowners in the South [57%] are the most likely to do so, while homeowners in the Midwest [43%] are the least likely.
  • Every state except Arkansas, New York, North Carolina and Virginia has adopted an ISO mold limitation for homeowners insurance coverage.
  • At $39,000, fire, lightning, and debris removal have the highest weighted average of homeowners losses.
  • Wind and hail damage are the most common claims, with 3.13% of all insured homeowners filing one in the past year. The average claim amount for wind and hail: $8,000.
  • About 1 in 15 insured homeowners and renters have a claim each year, while 1 in 30 has a property damage claim related to wind and hail.
  • Just 1 in 1,000 homeowners policies has a liability claim related to the cost of lawsuits for bodily injury or property damage that the policyholder or family members cause to others.
  • The average homeowners insurance premium rose by 5.6% in 2012, following a 7.7% increase in 2011, according to data studied by the National Association of Insurance Commissioners in 2015.

Besides insuring our lives to protect our loved ones should something happen, insuring our homes or our personal possessions tends to be the next priority for a majority of families in the US. With insurance premiums rising to almost $1,100 in 2013, however, there has been a sharp increase in costs for homeowners since 2005. Why? The average homeowners police in 2005 was just $764. Renters have had it a little easier, with the average policy cost remaining relatively consistent for the last decade and even going down in some years. Yet the principle remains the same, no matter what division of insurance is looked at. We need it, the industry makes money, and in doing so, we all win.

Insurance Trends and Statistics

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