General insurance industry providers perform an essential function in today’s economy. General insurance is generally defined as any insurance that is not considered life insurance. Depending on the type of occupation, risk exposure and money involved, insurance may be different for each industry or business. By taking out insurance policies, general insurers earn premiums which they then invest.
General or non-life insurance policies, including auto and home policies, provide payouts based on the loss resulting from a particular financial event. General insurance generally includes any insurance that is not considered life insurance. These are property and casualty insurance in the United States and non-life insurance in continental Europe.
What is the general insurance sector?
General or non-life insurance policies, including auto and home policies, provide payouts based on the loss resulting from a particular financial event. General insurance generally includes any insurance that is not considered life insurance. These are property and casualty insurance in the United States and non-life insurance in continental Europe.
General insurance industry providers perform an essential function in today’s economy. By covering losses resulting from disasters, accidents and lawsuits, P&C insurers protect policyholders against property damage and liability, providing victims with the means to resume their lives and businesses and continue contributing to the economy.
Companies in this sector initially purchase insurance policies for property, accident, liability and other general risks. By purchasing insurance policies, general insurers collect premiums which they then invest to generate additional income. The underwriting of life, disability, health and medical insurance represents a separate industry, although many companies compete in the two insurance markets.
Industry products:
- Car insurance
- Fire and other property damage insurance
- Financial loss insurance
- Cargo insurance
- Marine, air and other transport insurance
- Travel insurance
- Home Insurance
- general liability insurance
- Other general insurance
Industry Activities:
- Car Insurance Direct Writing
- Direct underwriting of property and casualty insurance
- Take out liability insurance directly
- Direct subscription of mortgage insurance and financial guarantee
- Direct underwriting of title and real estate insurance
- Take out guaranteed insurance directly
- Investment of premiums earned by taking out insurance policies
Each component of the general insurance sector represents a different type of coverage and some of them are explained below:
1. Property Insurance:
Property insurance means the insurance of buildings, machinery, inventory, etc. against Fire and Related Risks, Risks of Burglary, etc. So property insurance is a very broad category of general insurance and the type of cover you need depends on the type of property the insured is looking for. Property insurance covers property against natural hazards such as floods, earthquakes, tsunamis and forest fires; and man-made risks such as terrorism and theft.
2. Damage insurance:
Non-life insurance is accident insurance, and not always property-related. Although the distinction has blurred in recent years, property insurance is often tied to liability insurance and can provide protection against property damage such as auto, homeowners, and some commercial insurance.
3. Liability insurance:
Commonly included in P&C insurance, the insurance protects the policyholder from financial liability for injury to others or damage to property from others’ liability.
4. Car insurance:
Motor insurance protects the vehicle owner against damage to the driver/owner’s vehicle and also pays any third party liability determined in accordance with the law against the vehicle owner. Civil liability insurance is a legal obligation. The vehicle owner is legally responsible for any injury or damage to life or property of third parties caused by or resulting from the use of the vehicle in a public place. Driving a motor vehicle without insurance in a public place is an offense punishable under the Motor Vehicle Act.
5. Ocean Freight Insurance:
Goods in transit by sea, air, rail, road and courier can be insured under Marine Cargo Insurance. Ship and boat hulls can be insured under Marine Hull Insurance. In addition, there are specialized policies such as the aviation insurance policy for the insurance of airplanes and helicopters.
6. Travel insurance:
Travel insurance provides insurance protection while travelling. Travel insurance may be called by different names by insurance companies. It is important for the insured to check and understand whether the policy covers domestic travel or foreign travel or both. Travel insurance protects the insured against travel-related accidents, unforeseen medical expenses during the trip, losses such as lost luggage, lost passport, etc. and interruption or delay of flights or delayed arrival of baggage, etc. Travel insurance normally only provides coverage for a specific travel period. However, some insurance companies may offer various combinations of protection to meet specific customer needs, for example there could be a special policy for corporate frequent travelers etc.
Industry SWOT Analysis:
The global general insurance carrier industry provides protection against costs arising from a variety of P&C events, such as motor vehicle accidents, natural disasters, and medical malpractice. In the five years to 2012, industry revenues declined as investment income fell and premium prices fell. The next five years will be marked by strong revenue increases. Insurance demand will increase, premium prices will harden and investment income will rise as investor confidence returns to global markets.
Industry product segmentation is based on net premiums earned and does not include net investment income. In general, premium income accounts for approximately 90.0% of total industry income. The largest share of general insurance premiums comes from automobile insurance, which includes both private passenger and commercial coverage. This type of insurance covers the insured for any loss suffered by damage to property or persons as a result of a road accident (including theft). Individual consumers are the larger of the two segments. “Fire and other property insurance” represents the second largest share with 23% of total premiums in this segment.
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Creation date Thursday, December 20, 2012 Views 21718