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Insurance Carriers Industry Profile Excerpt
| SIC Codes: 6311, 6321, 6324, 6331, 6351, 6361, 6399 NAICS Codes: 5241 Page Length: 10-12 Last Quarterly Update: 9/15/2008 View Sample Industry Profile |
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In the US, about 5,000 companies provide insurance coverage of various sorts, with combined annual revenue of $1 trillion. Large companies include American International Group, MetLife, Aetna, and Allstate. The industry is highly concentrated: the 50 largest companies hold more than 60 percent of the market. Within product segments, concentration is even higher.
COMPETITIVE LANDSCAPE
Demand is driven by demographics and commercial transactions. The profitability of individual companies depends on effective marketing and on the ability to accurately estimate future payments. Large companies have big economies of scale in administration and in access to capital. Small companies can compete successfully by specializing in particular products or industries.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products are accident and health insurance, property and casualty insurance, life insurance, and the sale of annuities. Premiums earned from these products account for about 30 percent, 28 percent, 10 percent, and 12 percent of industry revenue, respectively.
All insurance carriers operate in essentially the same way: they collect premiums today in exchange for paying claims or benefits in the future. Their revenue consists of insurance premiums and income from the large investment portfolios they hold. The number of insurance products is large, and each has different premium plans and claim options.
Accident and health insurance policies are of three major types. Fee-for-service plans make payments for medical services from any provider. Managed care plans (which generally have lower premiums) pay only for services from providers the insurer ...
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