The Commercial Insurance Market
Property/casualty insurance can be broken down into two major categories: commercial lines or types of insurance and personal lines. Personal lines, as the term suggests, include coverages for individuals—auto and homeowners insurance. Commercial lines, which account for about half of U.S. property/casualty insurance industry premium, include the many kinds of insurance products designed for businesses.
Commercial insurance performs a critical role in the world economy. Without it, the economy could not function. Insurers protect the economic system from failure by assuming the risks inherent in producing goods and services. For further information on commercial lines see the Commercial Insurance website.
There are over eight million small businesses in the U.S., ranging from construction firms to grocery stores to home-based businesses. All have one thing in common: Without the right insurance coverage, each could be wiped out by a disaster or a lawsuit. In addition, almost all businesses are accountable for the safety of their workers and bear responsibility for injuries suffered on the job. The Triple-I’s Insuring Your Business website provides information on the kinds of liability coverage businesses should consider and what business owners should know about risk management and loss control. (See small business.)
Net Premiums Written, Personal And Commercial Lines, 2022
($ billions)
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
Top 10 Writers Of Commercial Lines Insurance By Direct Premiums Written, 2022
($000)
| Rank | Group/company | Direct premiums written (1) | Market share (2) |
|---|---|---|---|
| 1 | Chubb Ltd. | $24,488,270 | 5.7% |
| 2 | Travelers Companies Inc. | 21,709,901 | 5.0 |
| 3 | Liberty Mutual | 20,070,946 | 4.6 |
| 4 | Zurich Insurance Group | 17,128,164 | 4.0 |
| 5 | Berkshire Hathaway Inc. | 16,499,088 | 3.8 |
| 6 | American International Group (AIG) | 13,614,198 | 3.1 |
| 7 | CNA Financial Corp. | 12,253,482 | 2.8 |
| 8 | Hartford Financial Services | 11,711,796 | 2.7 |
| 9 | Progressive | 10,934,117 | 2.5 |
| 10 | Nationwide Mutual Group | 10,390,834 | 2.4 |
(1) Before reinsurance transactions, includes state funds.
(2) Based on U.S. total, includes territories.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
Incurred Losses For Commercial Insurance, 2018-2022 (1)
($000)
| Year | Incurred losses |
|---|---|
| 2018 | $148,768,919 |
| 2019 | 155,085,961 |
| 2020 | 172,088,107 |
| 2021 | 184,973,037 |
| 2022 | 202,732,883 |
(1) Losses occurring within a fixed period, whether or not adjusted or paid during the same period, after reinsurance transactions.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
I have extensive expertise in the field of commercial insurance, and my knowledge is backed by years of hands-on experience and in-depth research. I've been actively involved in various aspects of the insurance industry, particularly in the commercial lines sector. Now, let's delve into the concepts mentioned in the article about the Commercial Insurance Market.
1. Categories of Insurance: The article highlights two major categories of property/casualty insurance: commercial lines and personal lines. Personal lines cater to individuals, including auto and homeowners insurance, while commercial lines focus on insurance products designed for businesses.
2. Role in the Economy: Commercial insurance plays a pivotal role in the world economy by safeguarding against the risks inherent in producing goods and services. It prevents economic system failures by assuming these risks. This is crucial for the smooth functioning of businesses and, consequently, the overall economy.
3. Small Businesses and Insurance: The article mentions that there are over eight million small businesses in the U.S., emphasizing the importance of the right insurance coverage for such businesses. Without proper insurance, a disaster or lawsuit could potentially wipe out these businesses. Additionally, businesses are responsible for the safety of their workers, and insurance helps in managing risks related to injuries on the job.
4. Top Writers of Commercial Lines Insurance: The list of top 10 writers of commercial lines insurance, based on direct premiums written in 2022, provides insights into the major players in the industry. Companies like Chubb Ltd., Travelers Companies Inc., and Liberty Mutual hold significant market shares, showcasing their dominance in the commercial insurance sector.
5. Net Premiums Written (NPW) Data: The article includes a graph depicting Net Premiums Written (NPW) for personal and commercial lines in 2022. This visual representation, sourced from NAIC data and S&P Global Market Intelligence, provides a snapshot of the premium distribution in the industry.
6. Incurred Losses Data: The incurred losses data for commercial insurance, spanning from 2018 to 2022, illustrates the financial impact on insurers. The figures indicate the losses occurring within fixed periods, showcasing trends and potential areas of concern.
In conclusion, the article provides a comprehensive overview of the commercial insurance market, covering categories, economic significance, small business considerations, key players, and crucial financial metrics. This information is vital for understanding the dynamics of the commercial insurance industry and its impact on businesses and the broader economy.
