Global Insurance Industry & Trends
• Worldwide insurance premiums totaled $4.270 trillion in 2008, up about 6.3% from $4.061 trillion in 2007.
• Insurance Industry is 6% of world’s GDP
• Life Insurance is close to $ 2.8 trillion worldwide
• Other Insurance is about $ 1.8 trillion (Health Insurance, General Insurance or P&C Insurance)
• USA employees about 2.0 million people in this industry
• USA Insurance Market is about $ 1.1 trillion , the largest and over 25% of global market
• Life, accident (including supplemental health) and annuity premiums in the United States will total an estimated $679 billion
• USA Property and casualty premiums will total about $450 billion
• U.S. life insurance firms held about $4.51 trillion in assets in 2008, according to the Federal Reserve Bank
• Approximately 4,500 companies underwrite insurance in America, but say only about 45 carriers in Life, Health & P& has the exposure or capacity to underwrite risks across majority States in America
• According to Swiss Re, total insurance premium volume for 2008 was $1.75 trillion in Europe; $933.3 billion in Asia; $104.9 billion in Latin America and the Caribbean; $29.2 billion in the Middle East and Central Asia; and $54.7 billion in Africa.
• Per capita premiums worldwide were $646 in 2008, compared to $2,990 in North America. More than 87% of that year’s premiums were earned in industrialized nations, leaving a bit more than 12% earned in emerging markets.
• The best growth was in emerging markets, including a 16.3% premiums increase in 2008 in South and East Asia. Europe showed a 6.2% decline while North America showed a 3.1% decline.
• Massive sources of insurance company earnings come from the sale of annuities and other retirement and investment products
• 2008’s stock market meltdown had a significant effect on profits and assets at life insurance companies in particular, and property & casualty companies to a lesser degree.
• Increasing consolidation, convergence and globalization
• An evolving socioeconomic and political context
• Changing consumer concerns and buying behavior
• Rapidly developing technology to achieve Business @ the Speed of Thought
• Broadening distribution patterns including Social Media
• Shifting regulations
• Total insurance IT spending devoted to e-business is estimated at about US$1.6 billion today and will likely grow 5 percent yearly for the next two years
• In both Life & General sectors, most IT budgets are devoted to agent/ distributor systems, but life/health insurers devote almost double the amount to policyholder portals that property/casualty insurers do
• Big IT spends are into large transformational projects involving a. Policy Admin b. Claims c. Underwriting
Property/Casualty trends from IT & Portal point of view
• E-business accounts for approx 10% percent of P&C IT spending mostly retail insurance like Auto & Home
• P/C e-business means agent e-business
• Insurers look to agent e-business to differentiate themselves from close competitors
• The value of agent e-business is in speed and cost savings
• Insurers Portal use is limited in B2C but growing
• Insurers Portals are for Information, Reputation & Retention, even more than cost savings
Life & Annuity trends from IT & Portal Point of view
• E-business accounts for about 6% of IT spending
• E-business is tilted toward agents, but policyholder portals are important and growing
• Agent portal use is strong and creating value + market differentiators
• Agent e-business is also about information sharing
• Insurers Portal use is limited, but growing especially into B2B segment
• Insurers Portals deliver cost savings as well as improved brand and service
Investment in e-business for prospects is minimal
Source: Swiss Re 2008 data + Other Research Papers
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