U.S. Remains Leader in Gross Written Premium

NU Online News Service, Sept. 13, 1:21 p.m. EDT

With global gross written premium for the property and casualty insurance industry standing at $1.15 trillion, the United States still ranks number one in gross written premium, but expansion of the marketplace remains a challenge for insurers, according to Aon Benfield.

In its 6th annual Insurance Risk Study, the reinsurance broker ranks the top 50 global markets by gross written premium, and finds that the U.S. leads the way with $456 billion in P&C GWP, which translates into slightly more than 3 percent insurance penetration (defined as the ratio of premium to GDP).

Second on the list is Japan with $77 billion in GWP. Germany is third at $68 billion followed by the United Kingdom at $63 billion.

China is ranked sixth at $46 billion in GWP and insurance penetration of less than 1 percent.

While the U.S. is ranked number one in GWP, the nation of Slovenia has a higher insurance penetration at close to 4 percent, but it is ranked near the bottom of the list with P&C GWP of $1.8 billion.

Aon says that international premium growth “remains a challenge for the industry with none of the top-10 countries showing an increase in insurance penetration.”

Absolute premiums, Aon notes, decreased for 5 of the top-10 countries, and with the exception of China, “showed only modest increases in the others.”

Aon says, “Combined with depressed investment yields, insurers remain under significant pressure to expand their top-line results.”

The 26-page report aims to provide benchmarks for chief risk officers, actuaries and other executives involved in modeling risk.

The report ranks “global-underwriting volatility by line of business and by territory,” says Aon, with property remaining “substantially more volatile than other major lines.”

“Overall, volatility parameters are in line with last year’s study, but they do not yet reflect 2011’s significant catastrophe activity,” says Aon.

The report also touches on reserve activity noting that reserve risk “remains a potential significant source of leveraged cyclical uncertainty and a continued threat to insure solvency.”  

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