United States Insurance Report Q3 2012

The United States Insurance Report considers the prospects for both life and non-life (property & casualty and health) insurers. What both segments have in common is that the major companies have been able to leverage a combination of strengths to remain profitable – and, in many cases – to grow quite rapidly in 2011: this has been face of enormous challenges.

The report identifies the major trends and themes in both the life and the non-life segments. It incorporates BMI’s latest economic forecasts and projections for relevant aspects of the US economy, such as spending on healthcare and registrations of automobiles. Crucially, the report places the US insurance sector in the context of all the other national markets that are surveyed by BMI.

The published results of the major life insurance companies confirm that they are major beneficiaries of the ongoing growth of organised savings in the United States, with growth in premiums written the norm.
Some of the leading companies have posted double-digit growth in sales last year. Many have maintained levels of profitability (and, in the case of mutuals, increased dividend payments to policyholders) in spite of the low interest rate environment and periodic volatility in financial markets through H211. Although the level of profitability of the property & casualty companies has fallen to multi-year lows, the latest data, published in mid-April 2012 shows that the segment performed well in a year marked by low interest rates. The non-life insurance companies also had to contend with net losses and loss adjustment expenses (LLAE) in excess of US$35bn last year.

Relative to its peers in other developed countries, the US insurance sector continues to appear prospective in terms of its Risk/Reward Ratings. BMI envisages substantial growth in absolute terms through the forecast period, even if this is driven mainly by a rise in nominal GDP. The high levels of non-life penetration and life density indicate that both segments play a central role in risk management by households and businesses: the overwhelming majority of the organised savings solutions in the country are provided by life insurance companies, affiliates, or commercial partners. We would also emphasise that the overall sector has been strengthened by a regulatory regime that, overall, is very efficient and by the innovation of the insurance companies themselves.

Over the last quarter, BMI has made the following changes: 􀂃 The detailed assessment of the performance of the entire property & casualty segment through 2011, published by the Property Casualty Insurers Association (PCI), has been incorporated into the discussion of trends and developments in the non-life segment.

 The assessment of developments in the life segment now incorporates the extensive comments on conditions and trends published by the major companies (both listed and mutual) in their reports on 2011 and Q411.

Projections include the latest wave of data which points to broad-based growth across much of the US economy.

Insurance Industry Reports of United States 2012

Published: May 2012                        No. of Pages: 71                        Price:  US $ 1175

Table of Contents


Executive Summary . 5
Table: Total Premiums, 2008-2016 5
Key Insights On The US Insurance Sector .. 5
SWOT Analysis 7
US Insurance Industry SWOT 7
US Political SWOT 8
US Economic SWOT .. 9
US Business Environment SWOT ... 9
Life Sector .. 10
Developed States Life Sector Overview . 10
Table: Developed States Life Premiums, 2008-2016 (US$mn) 10
US Life Sector Update . 11
Table: Breakdown Of Life/Health Insurance By Major Lines – Direct Written Premiums, 2010 (US$mn).. 14
Life Industry Forecast Scenario 15
Table: Life Premiums, 2008-2016 15
Growth Drivers And Risk Management Projections . 15
Population ... 15
Table: Insurance Key Drivers, Demographics, 2008-2016 .. 16
Non-Life Sector .. 17
Developed States Non-Life Sector Overview . 17
Table: Developed States Non-Life Premiums, 2008-2016 (US$mn) . 17
US Non-Life Sector Update .. 19
Table: Direct Premiums Written, 2010 (US$bn) .. 21
Non-Life Industry Forecast Scenario ... 22
Table: US Total Non-Life Premiums 2008-2016 .. 23
Growth Drivers And Risk Management Projections . 23
Macroeconomic Outlook .. 23
Table: GDP By Expenditure, Real Growth, 2008-2016 ... 27
Political Stability Outlook 27
Table: Developed States Security Risk Ratings (scores out of 100, with 100 the best) . 31
Healthcare ... 31
Epidemiology ... 33
Table: Insurance Key Drivers, Disability-Adjusted Life Years, 2009-2016.. 34
Motor ... 36
Table: Insurance Key Drivers, Autos Sales, 2009-2016 ... 37
Insurance Risk/Reward Ratings ... 38
Table: The US’ Insurance Risk/Reward Ratings .. 38
Table: Developed States Insurance Risk/Reward Ratings 39
Competitive Landscape 41
Major Players In The US Insurance Sector .. 42
Life Segment. 43
Table: Top 10 Life/Health Companies, 2009 ... 44
Table: Top 10 Health Insurance Companies, 2009 .. 44
Table: Top 10 Companies By Direct Written Premiums Market Share, 2009 (%) ... 45
Non-Life Segment . 46
Table: Top 10 Non-Life (Property/Casualty) Companies, 2009 ... 47
Table: Top 10 Reinsurers Of Property/Casualty Risks – US Business, 2009 ... 48
Table: US Top 10 Providers Of Passenger Auto Insurance . 48
Company Profiles .. 49
Local Company Profiles 49
Aetna Group. 49
American Family Insurance Group .. 49
Allstate . 50
Berkshire Hathaway. 51
The Hartford 52
John Hancock .. 53
Liberty Mutual . 54
Lincoln Financial Group . 54
MassMutual . 55
Nationwide ... 56
New York Life .. 57
United Health Group ... 57
WellPoint . 58
Regional Company Profiles .. 59
ACE Group .. 59
Allianz .. 59
AXA .. 60
ING .. 61
MetLife . 61
Principal Financial .. 62
Prudential Financial 63
State Farm ... 64
Travelers Group ... 65
USAA Group 66
Zurich America 66
BMI Methodology ... 67
Insurance Risk/Reward Ratings ... 68
Table: Insurance Business Environment Indicators And Rationale . 69
Table: Weighting Of Indicators 70Table: Total Premiums, 2008-2016. 5
Table: Developed States Life Premiums, 2008-2016 (US$mn) . 10
Table: Breakdown Of Life/Health Insurance By Major Lines – Direct Written Premiums, 2010 (US$mn). 14
Table: Life Premiums, 2008-2016 . 15
Table: Insurance Key Drivers, Demographics, 2008-2016 . 16
Table: Developed States Non-Life Premiums, 2008-2016 (US$mn) . 17
Table: Direct Premiums Written, 2010 (US$bn) . 21
Table: US Total Non-Life Premiums 2008-2016 . 23
Table: GDP By Expenditure, Real Growth, 2008-2016 . 27
Table: Developed States Security Risk Ratings (scores out of 100, with 100 the best) . 31
Table: Insurance Key Drivers, Disability-Adjusted Life Years, 2009-2016. 34
Table: Insurance Key Drivers, Autos Sales, 2009-2016 . 37
Table: The US' Insurance Risk/Reward Ratings . 38
Table: Developed States Insurance Risk/Reward Ratings . 39
Table: Top 10 Life/Health Companies, 2009 . 44
Table: Top 10 Health Insurance Companies, 2009 . 44
Table: Top 10 Companies By Direct Written Premiums Market Share, 2009 (%) . 45
Table: Top 10 Non-Life (Property/Casualty) Companies, 2009 . 47
Table: Top 10 Reinsurers Of Property/Casualty Risks – US Business, 2009 . 48
Table: US Top 10 Providers Of Passenger Auto Insurance . 48
Table: Insurance Business Environment Indicators And Rationale . 69
Table: Weighting Of Indicators. 70