Global Property Insurance Industry Report
Property insurance provides protection against risks to property, such as fire, theft and some weather damage. This cover can include home insurance, renters’ insurance, flood insurance and earthquake insurance. Personal property is generally covered by a homeowners or renters policy, unless it is of particularly high value, in which case it can usually be covered by purchasing an addition to the policy called a "rider". If a claim is filed, the policy will either reimburse the holder of the policy for the actual cost of repairing the damage, or the replacement cost of the item.
There is a range of types of property insurance based on the type of cover:
- Home Insurance: A form of property cover designed to protect an individual's home against damage to the building, or to possessions in the home. This can be further categorized as buildings insurance & contents insurance. In some countries these are offered as two different covers and in some countries both are included. While home insurance generally covers most situations where loss could occur, some events are typically excluded from policies, namely: earthquakes, floods, acts of war.
- Renters’ policy: This insurance provides coverage for a policy holder's belongings within a rental property and for the owner’s legal liability to the tenant.
- Commercial property cover: This protects commercial property from perils like fire, theft and natural disaster. Generally businesses, including manufacturers, retailers, service-oriented businesses and not-for-profit organizations are the policy holders for this type of protection.
Property insurance can also provide cover against open perils or named perils:
- Open perils: Refers to policy that insures against loss to cover property from all causes except those that are specifically excluded. This type of protection is expensive because it is more comprehensive.
- Named perils: The named peril policy covers losses caused to covered property only by the perils explicitly listed in the policy. A typical broad form of named peril insurance includes cover from fire, windstorm, hail, riot, vandalism, explosion and smoke. Flood insurance and earthquake insurance are two other common examples of named peril policies.
Regional Market Shares
The insurance industry in the US is the largest of any country in the world in terms of revenue and insurance premiums historically contributed around 8% of GDP in the US. Gross premiums written total more than $1 trillion and of this property/casualty (P/C) insurers account for more than 45%.The US market for property cover is fragmented with State Farm Group, Allstate Insurance Group and Farmers Insurance Group the leading providers in this industry.
Europe is a more than a €1.1 trillion industry for insurance, of which gross property premiums total more than €90 billion. Germany, France, UK are the largest markets for home cover in Europe. The Generali Group and Allianz are some of the leading companies in the property protection industry in Europe.
In Japan property insurance is more than a $14 billion industry and is projected to rise to more than an $18 billion industry in the medium term. American Home Assurance Company and MS&AD Insurance Group Holdings, Inc. are key players.
Key trends across the industry include:
Telemetry-based product innovation is developing quickly and likely to penetrate the property insurance industry. Home automation or “smart home” technology is making entry through popular consumer solutions and provides opportunities for underwriters to recognize risk factors among customers. As smart home technology evolves, insurers may utilize real-time telemetric data to assess of risk and prevent losses. This will also help them to issue more intelligent policies based on live data emanating from customer homes. Homeowners are also interested in home automation capabilities for the premium discounts attached to it as companies are willing to offer discounts for security systems, fire protection systems, camera systems and some water-leak detection. For instance Allstate Insurance offers a 25% premium discount for those who sign up for a home monitoring service.
Geocoding is another emerging trend. Rather than only showing information about the neighborhood, detailed geocoding can offer data about a building’s individual attributes, taking into account factors like structural integrity and a building’s footprint. With this information, insurance companies can determine with greater accuracy what kind of risks the property can withstand.
In most countries, the channels to reach the customers are becoming more digital, particularly with the expanding use of mobile devices. Industry analysis predicts that in Europe digital interactions with financial services organizations will outnumber face-to-face by 250 to 1 in the near future.
List of Top Analysts
- Property Casualty Insurers Association of America
- Insurance Europe
- The Life Insurance Association of Japan
- American Insurance Association
- The Global Federation of Insurance Associations
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