It’s simply human nature to think that no harm will ever come, or hit close to home. Unfortunately, things go wrong from time to time. Because the unexpected is possible at any given moment, it’s vital to have insurance, business insurance, liability insurance, and professional liability insurance for the best prevention possible. As the old saying goes, “Hope for the best, but prepare for the worst.”
It pays to have property, auto, and life insurance for personal protection. On the business side, it's just as important to have things like casualty, property, professional liability, and general liability insurance in order to protect the personal and financial assets of the company. Having these insurance plans in place can be the difference between success and bankruptcy. (http://techinsurance.com/coverage/liability_protection.aspx)
Regrettably, it’s often difficult to realize the importance of having a prevention plan in place until disaster strikes. Many know that having coverage is important, and yet, still do not make the proper moves to protect themselves from unforeseen catastrophe. The following is a list of five case studies where the lack of sufficient insurance, liability insurance, or professional liability insurance resulted in crippling a company. These case studies will present you with the necessary information on how your company is at stake without proper insurance coverage. (http://techinsurance.com/coverage/liability_protection.aspx)
Federal-Mogul
Federal-Mogul is a large automotive parts manufacturer headquartered in Southfield Michigan. In 2001, the company had to file for Chapter 11 bankruptcy because of the amount of liability it was facing from asbestos claims made by workers who came into contact with the substance when handling various different automotive parts. Much of these claims were made to cover liability associated with asbestos-related sickness, including cancer.
The problems suffered by Federal-Mogul were multifaceted with respect to liability insurance. In reality, the company acquired companies that were already facing liability as a result of asbestos-related claims.
The dilemma with Federal-Mogul wasn't that these companies didn't have liability insurance; it was whether or not they had the right type of liability insurance, and whether or not they could protect themselves from things like professional liability. Federal-Mogul thought they were covered, but soon found that they were not.
Federal-Mogul was under the notion that they could use a multi-faceted strategy to beat asbestos-related liability claims. The plan was to fight in the courts and lobby Congress for changes in legislation affecting liability claims. That approach caused them to lose in court.
In 2001, Federal-Mogul was forced to claim Chapter 11 bankruptcy. Fortunately, the bankruptcy actually helped the company rebuild itself financially, and is currently running strong today. Alas, they could have avoided losses to their company, and their reputation, if they didn’t take a risk on their liability insurance and professional liability strategies. Indeed, leaving things at risk is what costs companies with respect to insurance time and time again. (http://articles.latimes.com/2005/aug/20/business/fi-rup20.6) (http://www.asbestosnetwork.com/news/nw_012908_asbestos_bankruptcy.htm)
Union Carbide (http://chronicle.com/news/article/4856/liability-concerns-spike-union-carbides-land-donation-to-west-virginia-u)
The Bhopal disaster is perhaps one of the most famous examples of corporate catastrophe. It serves as a first-rate case study surrounding issues of liability insurance and professional liability.
Back in 1984, a pesticide plant owned by a Union Carbide subsidiary released 40 tons of MIC gas into the atmosphere, killing between 2500 and 5000 people. Some speculate that the death toll may have been even higher than reported.
Understandably, Union Carbide was facing countless losses due to liability claims coming from the injured and families of the deceased. Regrettably, they did not have the proper liability insurance to cover these losses. Millions in court were spent by Union Carbide fighting some of these initial legal battles.
While the Bhopal incident provides a great case study in liability insurance and professional liability, business text books across the world cite it as an example of how not to deal with issues of risk management. The proper assessment of risk would have evaded such a monumental catastrophe.
Luckily for Union Carbide, they were able to settle all claims with the Indian government for a cost of $470 million. Although Union Carbide could have avoided paying the $470 million by engaging in a proper strategy involving liability insurance and risk management, they in reality saved money by passing through the litigation process.
The Exxon Valdez (http://en.wikipedia.org/wiki/Exxon_Valdez_oil_spill)
The Exxon Valdez is yet another famed case of corporate calamity dealing with the issues of liability insurance and professional liability. It supplies a solid example of why liability insurance is so significant for executives and business professionals at all levels.
The Exxon Valdez was an oil cargo ship that hit a reef in the Prince William Sound off the coast of Alaska. The huge oil spill ended up costing Exxon in excess of $2.5 billion in punitive damages to the people affected by the spill in the area. Some of the legal issues involved are still being fought today, even after the initial payout of $5 billion was brought down to $2.5 billion.
The Exxon Valdez disaster further illustrated the importance of both liability insurance and risk management at the executive level. Executives at Exxon Valdez face professional liability costs as a result of poorly executed decision making for the liability of the company.
The Savings and Loan Crisis (http://en.wikipedia.org/wiki/Savings_and_Loan_crisis)
The late eighties and early nineties saw one of the worst financial crises in American history, with a total cost of around $160 billion. Accounting firms are still litigating concerns contiguous to the liability insurance and professional liability of the case, and it’s yet another instance of the gravity of having the proper insurance in place.
Sunday, August 17, 2008
Friday, August 8, 2008
History of insurance
In some sense we can say that insurance appears simultaneously with the appearance of human society. We know of two types of economies in human societies: money economies (with markets, money, financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments and so on). The second type is a more ancient form than the first. In such an economy and community, we can see insurance in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one's neighbour, the other neighbours must help. Otherwise, neighbours will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread (for example countries in the territory of the former Soviet Union).
Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen.
Achaemenian monarchs were the first to insure their people and made it official by registering the insuring process in governmental notary offices. The insurance tradition was performed each year in Norouz (beginning of the Iranian New Year); the heads of different ethnic groups as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin) the issue was registered in a special office. This was advantageous to those who presented such special gifts. For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special offices.
The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran: "[W]henever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much."[1]
A thousand years later, the inhabitants of Rhodes invented the concept of the 'general average'. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinkage.
The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "benevolent societies" which cared for the families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Before insurance was established in the late 17th century, "friendly societies" existed in England, in which people donated amounts of money to a general sum that could be used for emergencies.
Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed.
Toward the end of the seventeenth century, London's growing importance as a centre for trade increased demand for marine insurance. In the late 1680s, Mr. Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the leading market (note that it is not an insurance company) for marine and other specialist types of insurance, but it works rather differently than the more familiar kinds of insurance.
Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In 1680, he established England's first fire insurance company, "The Fire Office," to insure brick and frame homes.
The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses. In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners' organization. In recent years, some have called for a dual state and federal regulatory system (commonly referred to as the Optional Federal Charter (OFC)) for insurance similar to that which oversees state banks and national banks
Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen.
Achaemenian monarchs were the first to insure their people and made it official by registering the insuring process in governmental notary offices. The insurance tradition was performed each year in Norouz (beginning of the Iranian New Year); the heads of different ethnic groups as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin) the issue was registered in a special office. This was advantageous to those who presented such special gifts. For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special offices.
The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran: "[W]henever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much."[1]
A thousand years later, the inhabitants of Rhodes invented the concept of the 'general average'. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinkage.
The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "benevolent societies" which cared for the families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Before insurance was established in the late 17th century, "friendly societies" existed in England, in which people donated amounts of money to a general sum that could be used for emergencies.
Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed.
Toward the end of the seventeenth century, London's growing importance as a centre for trade increased demand for marine insurance. In the late 1680s, Mr. Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the leading market (note that it is not an insurance company) for marine and other specialist types of insurance, but it works rather differently than the more familiar kinds of insurance.
Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In 1680, he established England's first fire insurance company, "The Fire Office," to insure brick and frame homes.
The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses. In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners' organization. In recent years, some have called for a dual state and federal regulatory system (commonly referred to as the Optional Federal Charter (OFC)) for insurance similar to that which oversees state banks and national banks
Wolrd Rankings in Insurance
TOP TEN GLOBAL INSURANCE COMPANIES
BY REVENUES, 2007 (1)
($ millions)
Rank
Company
Revenues (2)
Country
Industry
1 AXA $162,762 France Life/health
2 Allianz 140,618 Germany Property/casualty
3 Berkshire Hathaway 118,245 U.S. Property/casualty
4 Assicurazioni Generali 113,813 Italy Life/health
5 American International Group 110,064 U.S. Property/casualty
6 Aviva 81,317 U.K. Life/health
7 Prudential 66,358 U.K. Life/health
8 Munich Re Group 64,774 Germany Property/casualty
9 Aegon 62,383 Netherlands Life/health
10 State Farm Insurance Cos. 61,612 U.S. Property/casualty
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
Source: Fortune.
TOP TEN GLOBAL PROPERTY/CASUALTY INSURANCE COMPANIES
BY REVENUES, 2007 (1)
($ millions)
Rank
Company
Revenues (2)
Country
1 Allianz $140,618 Germany
2 Berkshire Hathaway 118,245 U.S.
3 American International Group 110,064 U.S.
4 Munich Re Group 64,774 Germany
5 State Farm Insurance Cos. 61,612 U.S.
6 Zurich Financial Services 55,163 Switzerland
7 Allstate 36,769 U.S.
8 Swiss Reinsurance 35,730 Switzerland
9 Millea Holdings 32,487 Japan
10 Travelers Cos. 26,017 U.S.
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
Source: Fortune.
TOP TEN GLOBAL LIFE/HEALTH INSURANCE COMPANIES
BY REVENUES, 2007 (1)
($ millions)
Rank
Company
Revenues (2)
Country
1 AXA $162,762 France
2 Assicurazioni Generali 113,813 Italy
3 Aviva 81,317 U.K.
4 Prudential 66,358 U.K.
5 Aegon 62,383 Netherlands
6 CNP Assurances 59,071 France
7 Nippon Life Insurance 57,859 Japan
8 MetLife 53,150 U.S.
9 China Life Insurance 43,440 China
10 Dai-ichi Mutual Life Insurance 39,863 Japan
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
Source: Fortune.
TOP TEN GLOBAL REINSURERS
BY NET REINSURANCE PREMIUMS WRITTEN, 2006
($ millions)
Rank
Company
Net reinsurance premiums written
Country
1 Munich Re $25,432.7 Germany
2 Swiss Re (1) 23,841.1 Switzerland
3 Berkshire Hathaway Re 11,576.0 U.S.
4 Hannover Re 9,353.5 Germany
5 Lloyd's 8,445.3 U.K.
6 SCOR (2) 4,885.2 France
7 Reinsurance Group of America Inc. 4,343.0 U.S.
8 Everest Re 3,875.7 Bermuda
9 PartnerRe 3,689.5 Bermuda
10 Transatlantic Holdings Inc. 3,633.4 U.S.
(1) Does not reflect full year premiums for GE Insurance Solutions Corp., acquired June 2006.
(2) Based on a pro forma consolidation of SCOR and Revios, acquired in 2006.
Source: Standard & Poors.
In 2007 global reinsurance premium written totaled $168.0 billion, up 9.8 percent from $153.1 billion in 2006, according to Standard & Poor’s.
TOP TEN GLOBAL INSURANCE BROKERS BY REVENUES, 2007
($ millions)
Rank
Company
Brokerage revenues (1)
Country
1 Marsh & McLennan Cos. Inc. $11,281.0 U.S.
2 Aon Corp. 7,096.0 U.S.
3 Willis Group Holdings Ltd. 2,463.0 U.K.
4 Arthur J. Gallagher & Co. 1,457.2 U.S.
5 Wells Fargo Insurance Services Inc. 1,282.1 U.S.
6 Jardine Lloyd Thompson Group plc 947.3 U.K.
7 BB&T Insurance Services Inc. 877.4 U.S.
8 Hilb Rogal & Hobbs Co. 780.0 U.S.
9 Brown & Brown Inc. 757.6 U.S.
10 Lockton Cos. L.L.C. 728.2 (2) U.S.
(1) Gross revenues generated by insurance brokerage, consulting and related services.
(2) Fiscal year ending April 30.
Source: Business Insurance, July 21, 2008.
Aon is the world's largest broker based on "pure placement." This includes insurance, reinsurance and wholesale brokerage revenues, but excludes employee benefits, consulting and other income. In 2007 Aon's placement revenues were $5.75 billion, followed by Marsh & McLennan Cos. ($5.40 billion), Willis ($2.16 billion), Wells Fargo ($1.03 billion), and BB&T ($809.5 million).
THE 20 MOST COSTLY WORLD INSURANCE LOSSES, 2007 (1)
($ millions)
Rank
Date
Location
Event
Insured loss in U.S. dollars
1 Jan. 18 Germany, U.K., Netherlands, Belgium et al. Winter storm Kyrill with winds up to 190 km/h; floods $6,097
2 Jun. 25 U.K. Floods caused by heavy rain 2,488
3 Jul. 20 U.K. Floods caused by heavy rain 1,991
4 Apr. 13 U.S. Storm, rain, hail, floods 1,568
5 Oct. 21 U.S. Witch urban forest fires in California 1,100
6 Jun. 7 Australia Storm with winds up to 125 km/h, rain; floods 957
7 Jun. 6 Oman, Iran, Gulf of Oman Cyclone Gonu with winds up to 170 km/h 649
8 Aug. 23 U.S. Thunderstorms, hail; floods 500
9 Mar. 1 U.S. Storms, tornadoes, hail 500
10 Jan. 31 Indonesia Torrential rain; 70% of city of Jakarta flooded 450
11 Aug. 16 Jamaica, Mexico, Martinique et al. Hurricane Dean with winds up to 230 km/h 450
12 Oct. 28 Mexico Floods caused by heavy rain, storms 450
13 Aug. 29 Japan Typhoon Fitow/No. 9 with winds up to 140 km/h 350
14 Dec. 9 U.S. Winter storm, freezing rain, snow; power failure 340
15 Aug. 8 Switzerland, Italy, Germany Heavy rain, floods, landslides 300
16 Jul. 16 Japan Niigata earthquake (magnitude 6.6) 300
17 Jun. 15 U.K. Floods caused by heavy rain 299
18 May 4 U.S. Tornadoes, thunderstorms, hail 260
19 Mar. 2 Japan Explosion and fire at chemical plant NA
20 Dec. 21 Space Loss of helium pressure at Rascom-QAF1 satellite NA
(1) Property and business interruption losses, excluding life and liability losses.
Note: Loss data shown here may differ from figures shown elsewhere for the same event due to revisions in loss estimates.
NA=Data not available.
Source: Swiss Re, sigma, No. 1/2008; ISO, insured losses for natural catastrophes in the United States.
THE TEN MOST COSTLY WORLD INSURANCE LOSSES, 1970-2007 (1)
($ millions)
Rank
Date
Country
Event
Insured loss in 2007 U.S. dollars (2)
1 Aug. 25, 2005 Hurricane Katrina; floods, dams burst, damage to oil rigs U.S., Gulf of Mexico, Bahamas, North Atlantic $68,515
2 Aug. 23, 1992 Hurricane Andrew; floods U.S., Bahamas 23,654
3 Sep. 11, 2001 Terrorist attacks on WTC, Pentagon and other buildings U.S. 21,999
4 Jan. 17, 1994 Northridge earthquake (magnitude 6.6) U.S. 19,593
5 Sep. 2, 2004 Hurricane Ivan; damage to oil rigs U.S., Carribean: Barbados et al. 14,115
6 Oct. 19, 2005 Hurricane Wilma; torrential rain, floods U.S., Mexico, Jamaica, Haiti et al. 13,339
7 Sep. 20, 2005 Hurricane Rita; floods, damage to oil rigs U.S., Gulf of Mexico, Cuba 10,704
8 Aug. 11, 2004 Hurricane Charley U.S., Cuba, Jamaica et al. 8,840
9 Sep. 27, 1991 Typhoon Mireille/No. 19 Japan 8,599
10 Sep. 15, 1989 Hurricane Hugo US, Puerto Rico et al. 7,650
(1) Property and business interruption losses, excluding life and liability losses. Includes flood losses in the United States insured via the National Flood Insurance Program.
(2) Adjusted to 2007 dollars by Swiss Re.
Note: Loss data shown here may differ from figures shown elsewhere for the same event due to differences in the date of publication, the geographical area covered and other criteria used by organizations collecting the data.
Source: Swiss Re, sigma, No. 1/2008.
THE TEN WORST EARTHQUAKES IN TERMS OF VICTIMS (1)
Rank
Victims
Date
Event/Magnitude (2)
Place
1 255,000 1976 Earthquake (M 7.5) China
2 220,000 2004 Earthquake (Mw 9.0), tsunami in Indian Ocean Indonesia, Thailand et al.
3 73,300 2005 Earthquake (Mw 7.6); aftershocks, landslides Pakistan, India, Afghanistan
4 66,000 1970 Earthquake (M 7.7); landslides Peru
5 40,000 1990 Earthquake (M 7.7); landslides Iran
6 26,271 2003 Earthquake (M 6.5) Iran
7 25,000 1978 Earthquake (M 7.7) in Tabas Iran
8 25,000 1988 Earthquake (M 6.9) Armenia, ex "USSR"
9 22,084 1976 Earthquake (M 7.5) Guatemala
10 19,737 2001 Earthquake (M 7.6) in Gujarat India, Pakistan, Nepal et al.
(1) Based on Swiss Re's list of deadliest catastrophes, 1970-2007.
(2) M is general magnitude that indicates the strength of an earthquake at its epicentre. Mw measures the total energy released by an earthquake and is proportional to the size of the fracture surface and the displacement. The Richter magnitude ML is the maximum amplitude of the ground motion signal recorded on a standarized seismograph.
Source: Swiss Re, sigma, No. 1/2008.
BY REVENUES, 2007 (1)
($ millions)
Rank
Company
Revenues (2)
Country
Industry
1 AXA $162,762 France Life/health
2 Allianz 140,618 Germany Property/casualty
3 Berkshire Hathaway 118,245 U.S. Property/casualty
4 Assicurazioni Generali 113,813 Italy Life/health
5 American International Group 110,064 U.S. Property/casualty
6 Aviva 81,317 U.K. Life/health
7 Prudential 66,358 U.K. Life/health
8 Munich Re Group 64,774 Germany Property/casualty
9 Aegon 62,383 Netherlands Life/health
10 State Farm Insurance Cos. 61,612 U.S. Property/casualty
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
Source: Fortune.
TOP TEN GLOBAL PROPERTY/CASUALTY INSURANCE COMPANIES
BY REVENUES, 2007 (1)
($ millions)
Rank
Company
Revenues (2)
Country
1 Allianz $140,618 Germany
2 Berkshire Hathaway 118,245 U.S.
3 American International Group 110,064 U.S.
4 Munich Re Group 64,774 Germany
5 State Farm Insurance Cos. 61,612 U.S.
6 Zurich Financial Services 55,163 Switzerland
7 Allstate 36,769 U.S.
8 Swiss Reinsurance 35,730 Switzerland
9 Millea Holdings 32,487 Japan
10 Travelers Cos. 26,017 U.S.
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
Source: Fortune.
TOP TEN GLOBAL LIFE/HEALTH INSURANCE COMPANIES
BY REVENUES, 2007 (1)
($ millions)
Rank
Company
Revenues (2)
Country
1 AXA $162,762 France
2 Assicurazioni Generali 113,813 Italy
3 Aviva 81,317 U.K.
4 Prudential 66,358 U.K.
5 Aegon 62,383 Netherlands
6 CNP Assurances 59,071 France
7 Nippon Life Insurance 57,859 Japan
8 MetLife 53,150 U.S.
9 China Life Insurance 43,440 China
10 Dai-ichi Mutual Life Insurance 39,863 Japan
(1) Based on an analysis of companies in the Global Fortune 500. Includes stock and mutual companies.
(2) Revenues include premium and annuity income, investment income and capital gains or losses, but exclude deposits; includes consolidated subsidiaries, excludes excise taxes.
Source: Fortune.
TOP TEN GLOBAL REINSURERS
BY NET REINSURANCE PREMIUMS WRITTEN, 2006
($ millions)
Rank
Company
Net reinsurance premiums written
Country
1 Munich Re $25,432.7 Germany
2 Swiss Re (1) 23,841.1 Switzerland
3 Berkshire Hathaway Re 11,576.0 U.S.
4 Hannover Re 9,353.5 Germany
5 Lloyd's 8,445.3 U.K.
6 SCOR (2) 4,885.2 France
7 Reinsurance Group of America Inc. 4,343.0 U.S.
8 Everest Re 3,875.7 Bermuda
9 PartnerRe 3,689.5 Bermuda
10 Transatlantic Holdings Inc. 3,633.4 U.S.
(1) Does not reflect full year premiums for GE Insurance Solutions Corp., acquired June 2006.
(2) Based on a pro forma consolidation of SCOR and Revios, acquired in 2006.
Source: Standard & Poors.
In 2007 global reinsurance premium written totaled $168.0 billion, up 9.8 percent from $153.1 billion in 2006, according to Standard & Poor’s.
TOP TEN GLOBAL INSURANCE BROKERS BY REVENUES, 2007
($ millions)
Rank
Company
Brokerage revenues (1)
Country
1 Marsh & McLennan Cos. Inc. $11,281.0 U.S.
2 Aon Corp. 7,096.0 U.S.
3 Willis Group Holdings Ltd. 2,463.0 U.K.
4 Arthur J. Gallagher & Co. 1,457.2 U.S.
5 Wells Fargo Insurance Services Inc. 1,282.1 U.S.
6 Jardine Lloyd Thompson Group plc 947.3 U.K.
7 BB&T Insurance Services Inc. 877.4 U.S.
8 Hilb Rogal & Hobbs Co. 780.0 U.S.
9 Brown & Brown Inc. 757.6 U.S.
10 Lockton Cos. L.L.C. 728.2 (2) U.S.
(1) Gross revenues generated by insurance brokerage, consulting and related services.
(2) Fiscal year ending April 30.
Source: Business Insurance, July 21, 2008.
Aon is the world's largest broker based on "pure placement." This includes insurance, reinsurance and wholesale brokerage revenues, but excludes employee benefits, consulting and other income. In 2007 Aon's placement revenues were $5.75 billion, followed by Marsh & McLennan Cos. ($5.40 billion), Willis ($2.16 billion), Wells Fargo ($1.03 billion), and BB&T ($809.5 million).
THE 20 MOST COSTLY WORLD INSURANCE LOSSES, 2007 (1)
($ millions)
Rank
Date
Location
Event
Insured loss in U.S. dollars
1 Jan. 18 Germany, U.K., Netherlands, Belgium et al. Winter storm Kyrill with winds up to 190 km/h; floods $6,097
2 Jun. 25 U.K. Floods caused by heavy rain 2,488
3 Jul. 20 U.K. Floods caused by heavy rain 1,991
4 Apr. 13 U.S. Storm, rain, hail, floods 1,568
5 Oct. 21 U.S. Witch urban forest fires in California 1,100
6 Jun. 7 Australia Storm with winds up to 125 km/h, rain; floods 957
7 Jun. 6 Oman, Iran, Gulf of Oman Cyclone Gonu with winds up to 170 km/h 649
8 Aug. 23 U.S. Thunderstorms, hail; floods 500
9 Mar. 1 U.S. Storms, tornadoes, hail 500
10 Jan. 31 Indonesia Torrential rain; 70% of city of Jakarta flooded 450
11 Aug. 16 Jamaica, Mexico, Martinique et al. Hurricane Dean with winds up to 230 km/h 450
12 Oct. 28 Mexico Floods caused by heavy rain, storms 450
13 Aug. 29 Japan Typhoon Fitow/No. 9 with winds up to 140 km/h 350
14 Dec. 9 U.S. Winter storm, freezing rain, snow; power failure 340
15 Aug. 8 Switzerland, Italy, Germany Heavy rain, floods, landslides 300
16 Jul. 16 Japan Niigata earthquake (magnitude 6.6) 300
17 Jun. 15 U.K. Floods caused by heavy rain 299
18 May 4 U.S. Tornadoes, thunderstorms, hail 260
19 Mar. 2 Japan Explosion and fire at chemical plant NA
20 Dec. 21 Space Loss of helium pressure at Rascom-QAF1 satellite NA
(1) Property and business interruption losses, excluding life and liability losses.
Note: Loss data shown here may differ from figures shown elsewhere for the same event due to revisions in loss estimates.
NA=Data not available.
Source: Swiss Re, sigma, No. 1/2008; ISO, insured losses for natural catastrophes in the United States.
THE TEN MOST COSTLY WORLD INSURANCE LOSSES, 1970-2007 (1)
($ millions)
Rank
Date
Country
Event
Insured loss in 2007 U.S. dollars (2)
1 Aug. 25, 2005 Hurricane Katrina; floods, dams burst, damage to oil rigs U.S., Gulf of Mexico, Bahamas, North Atlantic $68,515
2 Aug. 23, 1992 Hurricane Andrew; floods U.S., Bahamas 23,654
3 Sep. 11, 2001 Terrorist attacks on WTC, Pentagon and other buildings U.S. 21,999
4 Jan. 17, 1994 Northridge earthquake (magnitude 6.6) U.S. 19,593
5 Sep. 2, 2004 Hurricane Ivan; damage to oil rigs U.S., Carribean: Barbados et al. 14,115
6 Oct. 19, 2005 Hurricane Wilma; torrential rain, floods U.S., Mexico, Jamaica, Haiti et al. 13,339
7 Sep. 20, 2005 Hurricane Rita; floods, damage to oil rigs U.S., Gulf of Mexico, Cuba 10,704
8 Aug. 11, 2004 Hurricane Charley U.S., Cuba, Jamaica et al. 8,840
9 Sep. 27, 1991 Typhoon Mireille/No. 19 Japan 8,599
10 Sep. 15, 1989 Hurricane Hugo US, Puerto Rico et al. 7,650
(1) Property and business interruption losses, excluding life and liability losses. Includes flood losses in the United States insured via the National Flood Insurance Program.
(2) Adjusted to 2007 dollars by Swiss Re.
Note: Loss data shown here may differ from figures shown elsewhere for the same event due to differences in the date of publication, the geographical area covered and other criteria used by organizations collecting the data.
Source: Swiss Re, sigma, No. 1/2008.
THE TEN WORST EARTHQUAKES IN TERMS OF VICTIMS (1)
Rank
Victims
Date
Event/Magnitude (2)
Place
1 255,000 1976 Earthquake (M 7.5) China
2 220,000 2004 Earthquake (Mw 9.0), tsunami in Indian Ocean Indonesia, Thailand et al.
3 73,300 2005 Earthquake (Mw 7.6); aftershocks, landslides Pakistan, India, Afghanistan
4 66,000 1970 Earthquake (M 7.7); landslides Peru
5 40,000 1990 Earthquake (M 7.7); landslides Iran
6 26,271 2003 Earthquake (M 6.5) Iran
7 25,000 1978 Earthquake (M 7.7) in Tabas Iran
8 25,000 1988 Earthquake (M 6.9) Armenia, ex "USSR"
9 22,084 1976 Earthquake (M 7.5) Guatemala
10 19,737 2001 Earthquake (M 7.6) in Gujarat India, Pakistan, Nepal et al.
(1) Based on Swiss Re's list of deadliest catastrophes, 1970-2007.
(2) M is general magnitude that indicates the strength of an earthquake at its epicentre. Mw measures the total energy released by an earthquake and is proportional to the size of the fracture surface and the displacement. The Richter magnitude ML is the maximum amplitude of the ground motion signal recorded on a standarized seismograph.
Source: Swiss Re, sigma, No. 1/2008.
Thursday, August 7, 2008
Einsurance.net.in
This website/blog brings you the latest and the best offers, news and articles on insurance.
Subscribe to:
Posts (Atom)