13 Stats for Insurance Companies in 2021
The insurance industry is one of the most heavily affected industries during the pandemic. Find out how insurance companies are doing with these 13 stats.
Individuals and companies get insurance as protection against losses or damages. There are two primary types of insurance: life and non-life. Life insurance involves a policyholder actively paying premiums to an insurance company. The insurer then pays a lump sum to a designated beneficiary when the policyholder dies.
Non-life insurance generally involves motor, liability, and property insurance. Generally, compensation or reimbursement claims are filed as a result of loss or damage experienced by a client.
How did the pandemic affect the insurance industry? What will be its future? Be in the know with these 13 stats.
Net Premiums in the US Industry
Investopedia describes net premiums written as how much the company gets from the sum of premiums it has written, for assuming risk.
1. According to S&P Global Market Intelligence, in 2019, the US insurance industry net premiums written totaled $1.32 trillion, with premiums recorded by property/casualty (P/C) insurers accounting for 48 percent, and premiums by life/annuity insurers accounting for 52 percent.
2. According to the National Association of Insurance Commissioners, there were 5,965 insurance companies in the US in 2019. This includes companies specializing in property/casualty (2,496 companies), life/annuities (837), health (952), fraternal (82), title (61), risk retention groups (243) and other companies (1,251).
Employment in the US Insurance
The insurance industry remains to have employed a significant number of people, especially during the pandemic when mass layoffs were reported.
3. According to the U.S. Department of Labor, the US insurance industry employed around 2.9 million people in 2020— 1.7 million of those worked for insurance companies, including life and health insurers (962,500 workers), P/C insurers (665,900 workers) and reinsurers (27,300 workers), while the remaining 1.2 million workers were employed by insurance agencies, brokers and other insurance-related enterprises.
4. According to a survey conducted by Deloitte, about 60% reported their companies had seen furloughs and layoffs, with over 50% reporting to have experienced compensation reductions, limitations on raises and bonuses, and promotion freezes.
As a response to the increasing need for healthcare and other loss and damages incurred during the pandemic, the insurance industry increased premiums to cushion the impacts of COVID-19.
5. It is estimated that by June 2020, US insurers and their foundations had donated about $280 million in the fight against COVID-19. U.S. auto insurers have also responded to the pandemic by returning over $14 billion to their customers nationwide.
6. According to Deloitte, 48% of insurance executives agreed that the pandemic “showed how unprepared our business was to weather this economic storm,” while only 25% strongly agreed their carrier had “a clear vision and action plan to maintain operational and financial resilience” during the crisis.
7. Global nonlife premiums were expected to be flat for the entire 2020, with a 1% decline in advanced markets. Despite these challenges, the industry is expected to rebound to 3% growth in 2021, with a potential 7% boost in emerging regions.
8. Deloitte expects a recovery of 3% growth in life insurance premiums for 2021.
9. It is estimated that life insurers may see 50% more losses on mortgage loans during the pandemic than what they experienced during the Great Recession.
10. According to Statista, average insurance penetration worldwide was around 7.2 percent in 2019, but this is forecast to increase in the next few years, mostly driven by emerging markets.
The pandemic has accelerated digitization strategies across many industries, including insurance companies. Investments were reportedly poured in to spur faster innovation, make way for quicker recovery, and fund for future growth. Unsurprisingly, online direct sales are expected to trend since most customers avoid meeting face-to-face with insurance salespeople during the pandemic.
11. According to a survey conducted by Deloitte, 61% expect to cut costs between 11% and 20% over the next 12-to-18 months. More stringent reductions are expected in the Asia-Pacific region (APAC), especially Australia and Japan— with 35% of respondents expecting cuts over 20% (only 19% expect cuts over 20% in Europe and 11% in North America).
12. From the surveyed respondents, 40% expect to increase investment in direct online sales. Around 66% of respondents are looking to increase spending on cybersecurity.
13. Around 74% of respondents also feel that their organization’s success after the pandemic may be hampered by employees’ fear of returning to the office.
Example of digitization
Online direct sales can be supported by digital ecosystems like Saphyte. Using the tool, insurance companies can systematically gather information from leads and clients and directly respond to their needs and personalize future interactions.
Quickly adapt to a post-pandemic world
As an insurance company, it’s important to keep track of the emerging trends in the industry. Be on your feet and accelerate your digital transformation. Get started here.