Insurance Industry

Insurance is something that almost all of us will need sometime, and it is worth understanding it before buying it.

Various types of insurance include motor insurance, which includes automobile, motorcycle, and boat insurance, health insurance, life insurance, home insurance, travel insurance, personal property insurance, keyman insurance, dental insurance, rental insurance, and more.

Often, insurance is required - especially in the cases of motor insurance. Other times, it is a safeguard.

Insurance is a form of risk-management which spreads risk of many people in exchange for small payments from each. Specifically, insurance transfers some type of risk (accident, theft, natural disaster, illness, etc) from one person or group to a more financially-sound entity in exchange for a payment (also known as a premium). Premiums are often annual or monthly, but depending on the type of insurance they can be at other intervals.

For example, a consumer can pay a certain amount to an insurer such as Motley Fool each year to insure that person's car. This sum represents the insurance company's assessment of the likelihood that the car will be damaged or wrecked. These data are normally taken from historical figures relating to the age, sex, profession, driving record, and accident history of the insured, as well as statistics concerning make and model of the car and its accident record, as well as the engine size, number of passengers, and even color of the vehicle.

Statistically, if the make and model of the vehicle in question, and/or its driver have been in numerous accidents, the insurance company will charge a higher premium in order to hedge expected losses. As the risk increases, so too do the premiums. In fact, sometimes, insurance companies will not eveninsure certain people and/or vehicles as the chance of them having to make a payout (in the event of an accident) will be almost guaranteed.

Types of Insurance

1. Life Insurance - Insurance guaranteeing a specific sum of money to a designated beneficiary upon the death of the insured, or to the insured if he or she lives beyond a certain age.
2. Health Insurance - Insurance against expenses incurred through illness of the insured.
3. Liability Insurance - This insures property such as automobiles, property and professional/business mishaps.

Challenges facing Insurance Industry

Threat of New Entrants:

The insurance industry has been budding with new entrants every other day. Therefore the companies should carve out niche areas such that the threat of new entrants might not be a hindrance. There is also a chance that the big players might squeeze the small new entrants.

Power of Suppliers:

Those who are supplying the capital are not that big a threat. For instance, if someone as a very talented insurance underwriter is presently working for a small insurance company, there exists a chance that any big player willing to enter the insurance industry might entice that person off.

Power of Buyers:

No individual is a big threat to the insurance industry and big corporate houses have a lot more negotiating capability with the insurance companies. Big corporate clients like airlines and pharmaceutical companies pay millions of dollars every year in premiums.

Availability of Substitutes:

There exist a lot of substitutes in the insurance industry. Majorly, the large insurance companies provide similar kinds of services – be it auto, home, commercial, health or life insurance.

Types of Insurance

1.Motor insurance

This includes automobile, truck, motorcycle, aircraft, boat, or any other form of motorized transportation. It is perhaps the most common type of insurance, and is required by law in many countries.

Motor insurance covers the insured party against financial loss that he may incur to repair his vehicle or a third party’s in the event of an accident. In return for annual or semi-annual premiums, the insurance company is bound to pay any losses as described in the policy. Such a policy may include property, liability or third party, and medical coverage.

Property coverage insures damage to or theft of a vehicle; liability covers bodily injury or property damage that may occur as a result of the insured’s actions, and medical coverage pays any fees necessary for bodily injuries, rehabilitation and in some cases foregone wages and funeral costs.

In many countries, all of these types of automovile insurance are required of vehicle owners. In some countries, or states, only third party is required. However, in the case of new vehicles, any banks which may be financing the vehicle may require full insurance as a condition of financing.

2. Health insurance

Most developed nations have government-funded health care which means that most or all citizens have access to medical facilities and treatment, as well as health insurance.

For example, the National health Service (NHS) in the United Kingdom pays for citizens’ medical needs. However, in the US, there is no government-funded health policy - whether for insurance or treatment. As a result, US citizens and residents must be insured or risk facing astronomical medical bills, garnishing of wages, and bankruptcy. Often, medical insurance (both health and dental) is included in employee benefit packages in the US and other countries. Nevertheless, the issue of affordable health insurance and treatment in the US is one of the most controversial and heated topics, as many cannot afford either. If you live in a country without comprehensive national health care, then low cost health insurance is a vital requirement.

3. Disability insurance

This form of insurance protects workers from injuries and illnesses which prevent them from doing their jobs. It can pay for existing commitments the policyholders may have such as outstanding bills, mortgages, utilities, and more.

Workers’ compensation is common in the US, and pays a worker his wages and medical expenses in the event of an injury on the job.

Permanent disability which prevents a worker from ever working again is covered by total permanent disability insurance. This provides the disabled employee with benefits for the rest of his or her life, or according to the terms specified in the policy. Companies can purchase a similar type of insurance, called, disability overhead insurance. This pays for ongoing overhead costs of a business while the owners are not able to work.

4. Property insurance

This type of insurance typically covers things like homes, machinery, crops, valuable goods, shipped cargo, rented property (homes or apartments), and more.

It can cover damages as a result of various activities including acts of God (earthquakes, floods, storms, hurricanes, etc), vandalism, terrorism, fraud, and more.

5. Liability insurance

This covers negligent acts of an insured party with reference to a vehicle or a home. It protects the insured against legal claims and indemnification.

There are various types of liability insurance such as professional indemnity insurance Environmental liability insurance and Prize indemnity insurance .

Professional indemnity insurance protects employees from malpractice suits (as in the medical profession), errors and omissions (by appraisers, home inspectors, realtors, insurance agents, notaries, and others), and other acts of unintentional workplace negligence.

6. Credit insurance

This is taken by lenders who need coverage against the people that have credit with them (borrow money). In the event of their inability to pay it back (usually due to unemployment, disability, or death), this insurance protects the lender.

There are many other kinds of insuance, and even each of the major categories mentioned above has dozens of variations and types. They differ depending on the markets, the understanding of risk and availability of historical data, government regulation and law, cultural perceptions and expectations, and more.

7. Travel insurance

Travel insurance covers financial losses caused by trips abroad. Depending on the policy in question, in may cover lost luggage, theft of personal possessions, medical costs and delayed flights.

List of Major Insurance Companies Worldwide:

Sr. No.	Company Name	Country
1	21 ST CENTURY INSURANCE	USA
2	ACE	Bermuda
3	Aegon	Netherlands
4	Aflac	United States
5	Aioi Insurance	Japan
6	Allianz Worldwide	Germany
7	Allmerica Financial	United States
8	Allstate	United States
9	Ambac Financial Group	United States
10	American Finl Group	United States
11	American Intl Group	United States
12	American Natl Ins	United States
13	AmerUs Group	United States
14	AMP	Australia
15	Aon	United States
16	Arch Capital Group	Bermuda
17	Assurant	United States
18	Aviva	United Kingdom
19	AXA Group	France
20	Axis Capital Holdings	Bermuda
21	Bbloise Group	Switzerland
22	Berkshire Hathaway	United States
23	Britannic Group	United Kingdom
24	Cathay Financial	Taiwan
25	Cattolica Assicurazioni	Italy
26	China Life Insurance	China
27	Chubb	United States
28	Cincinnati Financial	United States
29	CNP Assurances	France
30	Conseco	United States
31	Converium Holding	Switzerland
32	Corporation Mapfre	Spain
33	Endurance Specialty	Bermuda
34	Erie Indemnity	United States
35	Euler Hermes	France
36	Everest Re Group	Bermuda
37	Fairfax Financial	Canada
38	Fidelity National Finl	United States
39	First American	United States
40	Fondiaria-SAI	Italy
41	Friends Provident	United Kingdom
42	Fuji Fire & Marine	Japan
43	Generali Group	Italy
44	Hannover Re	Germany
45	Hartford Finl Service	United States
46	Helvetia Patria	Switzerland
47	HHG	United Kingdom
48	Industrial Alliance Insurance and Finl	Canada
49	Insurance Australia Group	Australia
50	Irish Life & Permanent	Ireland
51	Jefferson-Pilot	United States
52	Legal & General Group	United Kingdom
53	Lincoln National	United States
54	Loews	United States
55	Manulife Financial	Canada
56	Markel	United States
57	Marsh & McLennan	United States
58	MBIA	United States
59	Mediolanum	Italy
60	Mercury General	United States
61	MetLife	United States
62	MGIC Investment	United States
63	Millea Holdings	Japan
64	Mitsui Sumitomo Ins	Japan
65	Munich Re	Germany
66	Nationwide Financial	United States
67	Nipponkoa Insurance	Japan
68	Nissay Dowa General Ins	Japan
69	Nürnberger Beteiligungs	Germany
70	Old Republic Intl	United States
71	PartnerRe	Bermuda
72	Phoenix Cos	United States
73	PICC Property & Casualty	China
74	Ping An Insurance Group	China
75	PMI Group	United States
76	Progressive	United States
77	Protective Life	United States
78	Prudential	United Kingdom
79	Prudential Financial	United States
80	QBE Insurance Group	Australia
81	Radian Group	United States
82	RenaissanceRe Holdings	Bermuda
83	Royal & Sun Alliance	United Kingdom
84	Safeco	United States
85	Sampo	Finland
86	Samsung Fire & Marine	South Korea
87	Sanlam	South Africa
88	Scor	France
89	Shin Kong Financial	Taiwan
90	Skandia Insurance	Sweden
91	Sompo Japan Insurance	Japan
92	St Paul Travelers Cos	United States
93	StanCorp Financial	United States
94	Storebrand	Norway
95	Sun Life Financial	Canada
96	Swiss Life Holding	Switzerland
97	Swiss Re Group	Switzerland
98	T&D Holdings	Japan
99	Torchmark	United States
100	Unipol	Italy
101	Uniqa	Austria
102	Unitrin	United States
103	UnumProvident	United States
104	White Mountains Ins	Bermuda
105	Wiener Stadtische	Austria
106	Willis Group Holdings	United Kingdom
107	WR Berkley	United States
108	XL Capital	Bermuda
109	Zurich Financial Services	Switzerland