The insurance industry helps the world be secure in many different ways. Insurance protects the investment into a home. Insurance helps protect a household’s finances should a medical emergency arise. This industry even helps protect drivers from a catastrophic loss should an accident occur. People pay a little now just to make sure they don’t have to pay out a lot later.
Insurance Industry Statistics
Insurance generates $1.1 trillion in the United States alone.
There are 37 insurance agencies listed in the Fortune 500 list of the largest organizations in the world. 20 of these agencies focus on just one field of insurance: property and casualty. This sector of the insurance industry actually accounts for nearly 50% of its total annual revenues.
Three Key Facts to Understand About This Industry
1. The activities of insurance carries accounted for almost 3% of the total GDP in the United States in 2010.
2. The industry employs over 2.3 million people.
3 Combining life and health insurance together, more than $600 billion was spent globally in the last year alone on premiums.
Takeaway: Insurance is one of those things that people feel like they can live without sometimes, but in the end it is worth the investment into a good policy that can meet specific needs. The unexpected can occur at any moment and if an emergency does occur, an insurance policy can help to maintain a certain lifestyle, pay for large unexpected expenses, or take care of bills that are caused when something happens to you that isn’t your fault. Even a basic policy is better than no policy at all.
Other Facts You Need to Know About Insurance
1. Berkshire Hathaway, run by Warren Buffet, is the largest property and casualty insurer in the world and is the 5th largest business in the United States.
2. Medicaid and Medicare account for about one-third of the total health care dollars spent in the US every year. Private health insurance accounts for another third.
3. Earthquake and tsunami insurance is often separate from typical policies and it doesn’t take a large earthquake to cause a lot of damage. The world’s most expensive earthquake didn’t even reach 6.0 in magnitude.
4. Insured natural catastrophic losses in the world amounted to a total of $31 billion in 2013. This was 50% lower than losses in 2012.
5. Overall insured losses that were covered by insurance polices totaled $125 billion.
6. Questionable claims for workman’s compensation rose by 16% for the last period documented in 2011-2012.
7. No fault fraud and abuse cost consumers over $680 million in the state of Florida alone.
Takeaway: Insurance seems like it is an easy way to make a quick buck, but that isn’t what the industry is for. Even though losses paid out were only 10% of the total revenues the industry brought in, it is important for this industry to keep a large cash reserve on hand in case something unthinkable should happen. Floods, earthquakes, cancer – these things will continue to happen to good people. Rather than be financially devastated by them, the insurance industry makes sure that if a policy is protecting someone, they’ll get the help they need.