Insurance offers financial protection to individuals and companies against various kinds of loss or damage. Providers evaluate the risks of insuring someone or something and issue clients with a policy based on their assessment. The policy is a legal contract between the insurance provider and the policyholder. The global insurance market was worth under five trillion U.S. dollars as of 2020, but this looks set to increase substantially in the coming years. Insurance penetration refers to how developed the insurance sector is in a country, and is the ratio of annual total insurance premiums to the gross domestic product. The vast majority of European countries had an insurance penetration of under ten percent in 2020.
What are the main types of insurance?
There are two broad types of insurance: life and non-life. In 2021, the highest value of life and non-life direct premiums was written on the U.S. insurance market. With life insurance, the policyholder keeps the plan active by paying premiums to the insurance company. When the policyholder passes away, the insurer pays a lump sum to the designated beneficiary. Clients with non-life insurance – also known as general insurance – can file a compensation or reimbursement claim for costs incurred as a result of loss or damage. Categories of general insurance include motor, liability, and property and casualty insurance.
Who are the world’s leading insurers?
In terms of market capitalization, the global insurance market was led by U.S.-based insurers as of September 2022. Additional information for the world’s current market leader, United Health, can be found here. Premiums written describe the total amount customers pay for insurance coverage and are an insurer’s main source of revenue. In 2021, U.S. insurer, Berkshire Hathaway, generated the highest revenue worldwide, reaching well over 200 billion U.S. dollars.
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