The insurance industry is split into sectors based on the different types of insurance products and risks covered by the policies. The first sector is property and casualty insurance, which is also referred to as P&C business. This covers the risk of damage to a property or business, and this category includes things like autos insurance, home insurance, commercial insurance, and also marine insurance. Within this, commercial insurance covers the risk of financial loss for a business, particularly the risk of claims by third parties or employees, and this is sometimes referred to as liability insurance. Marine insurance covers damage to ships, cargo, and also the shipping infrastructure. Companies which cover a range of different risks are known as multiline insurers, with Berkshire Hathaway being one of the largest examples of these. There's also many smaller specialist insurers which focus only on a particular type of risk, and they're referred to as monoline insurers. As a sector, P &C insurance is sometimes also referred to as general insurance. Now, this next sector is health insurance, which covers the risk of sickness of the policy holder, and particularly in the US, where health insurance is such a large market, there's a number of companies, such as the UnitedHealth Group, which specialize exclusively in this sector. The final sector is life insurance, which covers the risk of death of the policy holder. Now, as you'd expect, life insurance policies are a key part of the product offering, but actually, a number of other products are offered in terms of retirement and investment products, alongside life insurance. Now, the reason for this is that life insurance policies pay out after the death of the policy holder, whilst retirement and investment products pay out until the death of the policy holder. So retirement products allow the insurance company to manage their risk around policy holders dying sooner or later than expected, which is all a bit morbid, admittedly, but it is why these products tend to be offered alongside each other. Together, life insurance and health insurance are sometimes abbreviated to L&H insurance, and a key difference between life and non-life insurance is the timeframe. A typical general insurance policy will last for one or two years, whilst a life insurance policy will often cover many decades. Now, in terms of market size, the global insurance market was worth about 5 trillion euros in 2017, which is absolutely vast. And within this, health insurance was the smallest at just over a trillion euros. P&C insurance came in at around 1 1/2 trillion euros, and life insurance was the largest at just over 2 trillion euros. Now, within this, Americas represent around 40% of the insurance market, whilst EMEA and Asia Pacific represent about 30% each. AIG and Allianz are two of the largest global insurers, and they cover life, health, and P&C insurance. AIG and Allianz are two of the world's largest global insurance companies, and both of them cover all types of insurance, life, P&C, and health insurance.
