BBC News  1 hr ago  Comment 
Motorists are facing higher car insurance premiums than a year ago, a report from the AA suggests.  3 hrs ago  Comment 
Average annual policy costs rise 16% year-on-year, with expensive technology on cars and whiplash claims cited as reasons Drivers are paying almost £82 more for car insurance than a year ago and are likely to see premiums rise further, according...
Insurance Journal  3 hrs ago  Comment 
The Leavitt Group has purchased a majority stake in Murray and Murray Insurance Agency in Central California. Dan Lillard, a key team member of Murray and Murray, will become a co-owner and managing principal of the agency. Michael Murray, Patrick...
MarketWatch  7 hrs ago  Comment 
How to decide if you should alert your insurance company after a Halloween prank.
Insurance Journal  9 hrs ago  Comment 
South Carolina Director of Insurance Ray Farmer has extended consumer protections provided under an emergency regulation order to 15 additional South Carolina counties with damage resulting from Hurricane Matthew. Farmer issued Emergency...
Insurance Journal  9 hrs ago  Comment 
Confie, a national provider of personal and commercial lines insurance, has acquired Hulme Corp., dba Alamo Auto Insurance of East Texas. Founded in 2001 and based in Tyler, Texas, Alamo Auto focuses on providing non-standard auto insurance....
Insurance Journal  9 hrs ago  Comment 
A Lansing, Mich.-area doctor who is a former state lawmaker has been placed on probation for making false statements to an insurer. Judge Robert Jonker on Oct. 24 gave a significant break to Paul DeWeese, whose clinic, NBO Medical, performed …
Insurance Journal  9 hrs ago  Comment 
Ohio-based privately owned insurance brokerage firm, Hylant, has named Debbie Fischer to the newly created position of vice president, property/casualty service leader. Most recently, she was vice president, client services. In her new role,...
MarketWatch  9 hrs ago  Comment 
Are insurance companies the new Big Brother?


Companies within the Insurance sector are largely interested in helping private, public, and institutional clients hedge against risk. The way in which insurance companies aim to reduce the risk of their clients, on the most basic level, is through offering a guaranteed future payment for a contracted event. By charging clients a premium for this guaranteed future payment given that the contracted event occurs, the insurance company is providing its client with the assurance that under certain circumstances, say physical capital loss due to force majeure, the insurance company will assume all financial responsibility associated with the client’s losses. Calculations of this premium involve use of complex stochastic probability models meant to simulate the likelihood of a given event’s occurrence.

As there are countless origins of risk, there are countless insurance products available to hedge against those risks; however, the insurance sector itself is segmented into four distinct sub-sectors: Life insurance, property and casualty insurance, accident and health insurance, and miscellaneous insurance.

Insurance Industry Sub-Sectors

Life Insurance

Life insurance deals with policies that are written to hedge against the risk of death, accidental death, and in some cases, sickness. In many cases, liability to the insurer is limited based on cases dealing with suicide, war, riot, and fraud.

Companies within the Life Insurance Sub-Sector:

Casualty and Property Insurance

Casualty insurance deals with policies that are written to hedge against the risk of unforeseen accidents. Some examples are insurance policies for auto accidents or losses incurred at sea (Marine Insurance). In general, casualty insurance hedges against risks associated with liability and crime.

Companies within the Casualty and Property Insurance Sub-Sector:

Accident and Health Insurance

Health insurance deals with policies that are written to hedge against the risk of unexpected or unexpectedly high health costs. Interestingly, the insurer of health insurance policy can either be from the private sector or the public sector, subsidized by taxes.

Companies within the Accident and Health Insurance Sub-Sector:

Miscellaneous Insurance

Companies within the Misellaneous Insurance Sub-Sector:

Trends Within the Insurance Sector

Retiring Baby Boomer Generation/Convergence of Insurance Sector and Financial Industry

As the first of the baby boomers are set to retire within the next few years, financial and insurance firms remain pitted in a battle to provide them with financial funds to fuel their retirement. The traditional methods of retirement finance such as social security, 401ks, and corporate pension plans are becoming increasingly riskier as government legislature struggles to find a solution to social security deficits and companies find it harder and harder to meet the promises of current pension plans. Since the lines between financial institutions and insurance institutions has been blurred with the repeal of the 1999 repeal of the Glass-Steagall Act, which restricted the ability of insurance companies to provide financial services, aging baby boomers have become an increasingly attractive market to insurance companies.

To compete with the corporate pensions plans provided by the company, insurance companies are offering annuities to retirees. Annuities come in many, often complex, forms and packages. However, the underlying concept remains the same: purchase of the annuity is made with an upfront lump sum, with the promise of a steady periodic income as long as the contract requires.

Changing Interest Rates

Generally speaking, interest rates will affect any firm involved in any type of investment or firm that issues corporate debt or equity. Changes in the interest rate will invariably change the fundamental values of both equity and debt, since the fundamental value of debt is determined by the time weighted average of payments discounted by current short or long interest rates, and the fundamental value of equity is determined by the value of a firm today along with any projects in the future discounted by some factor over the risk free interest rate.

Systematically, the interest rates are roughly set through the supply and demand of money in the economy, most of the time with help from the Federal Reserves’ monetary policy.

Force Majeure and the Advent of Reinsurance

Companies in the Insurance Industry (90)

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