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United States Insurance Report Q2 2011: New research report available at Fast Market Research

New Financial Services market report from Business Monitor International: "United States Insurance Report Q2 2011"

PRLog - Feb. 23, 2011 - The US insurance sector accounts for about a quarter of total premiums written by non-life and life  companies worldwide. Approximately a third of all reinsurance sold worldwide is bought by US firms.  Aside from its absolute size, it is relatively fragmented, even though a process of consolidation has been  underway for some years. Companies such as State Farm (in the non-life segment) and MetLife (in the  life segment) have powerful brands, access to economies of scale and several other advantages.  Mutuals make up a large minority position in the market. The success and size of companies such as New  York Life and State Farm mean that some of the leading players do not need such access via listed  markets and instead focus on delivering the benefits of mutual status to their policyholders/members.    Foreign groups account for about an eighth of each of the non-life and the life segments. Zurich is the  largest foreign player in the overall non-life segment, while ING, AEGON and John Hancock have top  10 positions in the overall life segment. The foreign groups present all have the economies of scale,  within the US and in their businesses elsewhere, to compete.  Reinsurance is the main section of the market where foreign and (ultimately) foreign-owned companies  have the edge. The Lloyd's market in London, leading Bermuda-based reinsurers such as XL and  multinationals such as Swiss Re, Munich Re and Hanover Re, account for about 80% of the reinsurance  premiums written annually in the US.  To build a picture of the US non-life segment that is consistent with those calculated for other countries,  we use data provided by the Insurance Information Institute (III). We have added the net health insurance  premiums identified by the American Council of Life Insurers (ACLI) in its annual statistical  publications. Accordingly, we consider that non-life premiums rose from US$598.83bn in 2005 to  US$637.20bn in 2006, US$651.08bn in 2007 and US$654.65bn in 2008. These figures include health  premiums written by life insurers that rose from US$118.69bn in 2005 to US$141.20bn in 2006,  US$151.46bn in 2007 and US$165.03bn in 2008. In relation to 2010, we estimate that premiums  contracted by 3%. The III's review of the property and casualty insurers' 2009 results noted that net  premiums shrunk by 3.7%.  At the time of writing, competitive pressures continue to contribute to the slow growth rates of the nonlife  and life segments. Life penetration is also restricted by the mass of organised savings products that  fall outside the purview of the insurance sector. However, the absolute increases in premiums that BMI  forecasts for the next five years are substantial.  The US remains an important domicile for captive insurance companies. This is despite the proximity and  attractions of well established offshore domiciles such as Bermuda and the Cayman Islands.    Issues To Watch  Higher Costs  Despite stagnant premiums and while investment income is under pressure for many insurers, particular  costs are increasing. This means that it may be difficult for life/health companies, property/casualty  companies and health plans to contain claims costs over the coming year or so.    A Mixed Environment For Non-Life Insurers' Profits  Non-life insurers continue to face several challenges. First, the rate of return is significantly less than their  cost of equity capital, which is about 10%. Second, pricing for commercial insurance lines has been weak  as key aspects of the US economy remain soft. A third challenge is that in an environment of generally  low inflation, low nominal yields on bonds and very low interest rates, investment earnings will be  constrained.    US Credit (Non-Government Bond) Markets  US life/health insurers are one of the largest pools of capital that are exposed to any increase in volatility  in US credit markets. A decision by life/health insurers to reduce exposures to bonds, which accounted  for more than 75% of total investment assets in 2004, could have an adverse effect on credit markets.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/126937_united_states_insurance...

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

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Source:Fast Market Research
Location:Massachusetts - United States
Industry:Finance, Research, Banking
Tags:premiums, non-life, insurers, insurance, lifehealth, written, Health, reinsurance, re, credit
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