10 Best Insurance Firms in United States
10 Best Insurance Firms
When assessing the size and prominence of insurance companies, various metrics come into play. Among these metrics are market capitalization, which reflects the total value of a company’s outstanding shares on the stock exchange, as well as sales figures such as net premiums written annually or the number of policies sold. In this analysis, we’ll explore the rankings of the top 10 largest insurance companies using market capitalization, market share, and revenue as key indicators of their stature and influence in the industry.
ESSENTIAL POINTS TO REMEMBER
- Insurance firms play a significant role in the global financial landscape, despite lacking the glamour of investment banks or hedge funds.
- There is a diverse range of insurance companies varying in size and focusing on different types of policies, including health, life, and property & casualty.
- Market capitalization, commonly referred to as market cap, represents the total value of a company’s shares that are publicly traded.
- Certain insurance companies operate as mutual entities, where policyholders hold ownership.
- When evaluating insurance companies, it’s crucial to classify them based on their specific product offerings.
Top insurance players by market value
Market capitalization, also known as market cap, refers to the total value of a company’s outstanding shares, calculated by multiplying the current share price by the number of shares outstanding. This metric serves as a rapid gauge of a company’s worth in the eyes of investors.
Companies boasting substantial market caps typically represent established, conservative investments. They tend to exhibit steady growth trajectories and pose lower levels of risk. Mid-cap enterprises, while also established, often offer high growth potential. Conversely, small-cap firms, typically newer to the market, carry significant growth prospects but also entail higher investment risks, being more susceptible to economic downturns compared to their larger and mid-cap counterparts.
Investors have the opportunity to purchase shares of publicly traded companies within the insurance sector. Below are the largest non-health insurance companies, ranked by market capitalization on global stock exchanges as of Q1 2022:
List of Non-Health Insurance Firms Available for Public Trading
| Company Name | Market Capitalization |
|---|---|
| Berkshire Hathaway (U.S.) | $714 billion |
| Ping An Insurance (China) | $141 billion |
| AIA Group (Hong Kong) | $123 billion |
| China Life Insurance (China) | $106 billion |
| Allianz (Germany) | $89 billion |
| Cigna (US) | $76 billion |
| Zurich Insurance (Switzerland) | $67 billion |
| AXA (France) | $65 billion |
| Humana (U.S.) | $55 billion |
| Munich (Germany) | $39 billion |
List of Publicly Traded Health Insurance and Managed Health Care Corporations
| Company Name | Market Capitalization |
|---|---|
| United Healthcare (UNH) | $448 billion |
| CVS (CVS) | $136 billion |
| Anthem (ANTM) | $109 billion |
| Cigna (CI) | $76 billion |
| Humana (HUM) | $55 billion |
| Centene Corporation (CNC) | $48 billion |
| Molina Healthcare (MOH) | $18 billion |
| Bright Health Group (BHG) | $2 billion |
| MultiPlan Corporation (MPLN) | $2 billion |
| Alignment Healthcare (ALHC) | $1.6 billion |
Not every insurance enterprise is publicly traded. Instead, numerous insurers adopt a mutual company structure, wherein policyholders of participating policies hold partial ownership in the company. This mutual model in the insurance sector has roots dating back centuries and offers specific advantages to policyholders that are not present with publicly traded (stock company) insurers.
American Family Insurance is the largest mutual insurance company in the U.S.
Insurance companies.co
Top Insurance Giants Ranked by Sales and Product Line
It proves beneficial to delineate the various types of insurance lines when assessing the largest insurance corporations. Utilizing sales data becomes crucial, especially considering that some of the largest insurance entities in the United States aren’t publicly traded, hence making their market value challenging to ascertain.
Property & Casualty
Property and casualty insurers issue policies covering various properties such as real estate, residences, automobiles, and other vehicles. Additionally, they provide policies addressing liabilities arising from accidents or negligence related to these properties, aiming to mitigate the expenses associated with lawsuits or medical damages stemming from such incidents.
In 2020, the foremost U.S. property and casualty companies by net premiums written (the projected revenue from non-life policies over the contract’s duration, minus commissions and expenses) were:
| Company | Net Premiums Written (in billions) |
|---|---|
| State Farm Group | $66.2 |
| Berkshire Hathaway (BRK.A) | $46.4 |
| Progressive Insurance Group (PGR) | $41.7 |
| Allstate Insurance Group (ALL) | $39.2 |
| Liberty Mutual | $36.2 |
| Travelers Group (TRV) | $28.8 |
| USAA Group | $24.6 |
| Chubb (CB) | $24.2 |
| Farmers Insurance Group | $20.1 |
| Nationwide | $18.5 |
Providers of Life Insurance
Life insurance firms commit to disbursing a lump sum benefit upon the demise of the insured individual. While actuarial science has devised mortality tables to precisely project the future liabilities associated with policies, possessing financial robustness ensures that these firms can fulfill all obligations while generating profits.
In the United States, life insurance companies can be evaluated based on direct premiums written, which represent the number of new policies issued directly and not reinsured. For the year 2020:
| Company | Total Direct Premium (in billions) | Market Share |
|---|---|---|
| New York Life Grp | $11.7 | 6.75% |
| Northwestern Mutual | $11.3 | 6.52% |
| Metropolitan Group (MET) | $10.5 | 6.05% |
| Prudential of America (PRU) | $10.1 | 5.80% |
| Lincoln National | $8.4 | 4.83% |
| MassMutual | $7.9 | 4.57% |
| State Farm | $5.0 | 2.87% |
| Aegon (AEG) | $4.9 | 2.80% |
| John Hancock | $4.7 | 2.73% |
| Minnesota Mutual Grp | $4.7 | 2.70% |
Providers of Health Insurance
Health insurance firms offer policies designed to cover either all or a portion of the policyholder’s healthcare and medical expenses. These policies can be acquired individually or through an employer. Notably, the United States government stands as the principal health insurance provider in the nation through programs such as Medicare, Social Security, and Medicaid, which are administered by individual states.
According to the National Association of Insurance Commissioners (NAIC) 2020 report, the largest non-government sponsored health insurance companies in the United States, measured by the total direct premium collected, were:
| Company | Total Direct Premium | Market Share |
|---|---|---|
| UnitedHealth Group (UNH) | $177 billion | 14.1% |
| Kaiser | $104 billion | 8.3% |
| Anthem | $77 billion | 6.2% |
| Centene Corp. | $75 billion | 6.0% |
| Humana | $74 billion | 5.9% |
| CVS Healthcare (CVS) | $69 billion | 5.5% |
| CIGNA Health | $32 billion | 2.5% |
| Molina Healthcare | $21 billion | 1.7% |
| Independence Health | $21 billion | 1.6% |
Executive Compensation at Leading Health Insurance Companies
The chief executive officers (CEOs) of the six largest health insurance firms earn substantial annual salaries, exceeding $15 million each:
- Michael Neidorff of Centene: $26.4 million
- David Cordani of Cigna: $19.1 million
- David Wichmann of UnitedHealth Group: $18.9 million
- Joseph Zubretsky of Molina Healthcare: $18 million
- Bruce Broussard of Humana: $16.7 million
- Gail Boudreaux of Anthem: $15.5 million
Are Large Insurance Companies Favorable Investments?
Investing in insurance companies can provide a secure option for certain investors. These companies are structured to manage risk, which, in turn, can mitigate investment-related risks. Health insurance, given its susceptibility to rapid changes, presents the potential for significant growth compared to other insurance sectors.
Primary Investors in Insurance Companies
Typically, the primary investors in insurance firms are institutional entities. For instance, UnitedHealth Group (UNH) boasts 4,124 institutional owners, collectively holding over one billion shares.
Largest Homeowners Insurance Companies in the U.S.
The five largest homeowners insurance companies in the United States include State Farm, Allstate, USAA, Liberty Mutual, and Farmers. Collectively, these firms command over 45% of the homeowners’ insurance market share.
Leading Insurance Companies in Canada
In Canada, the five largest insurance companies are Manulife Financial Corporation, Great-West Lifeco, Desjardins, Sun Life Financial, and Fairfax Financial. Manulife stands as the nation’s largest insurer, with a workforce exceeding 35,000 employees and serving over 30 million customers.
Conclusion
Ranking the largest insurance companies can be approached from various angles. Investing in publicly traded insurance firms can aid in constructing a diversified investment portfolio with exposure to both financial and healthcare sectors. Understanding the primary insurance lines of a company helps discern competitors within the industry. Additionally, examining sales figures offers insights into the performance of public companies compared to privately held or mutual ones, which constitute a significant portion of the industry.
