THE TOP 10 GLOBAL INSURANCE
COMPANIES
FINANCE
THE TOP 10 GLOBAL INSURANCE
COMPANIES
Increasing profitability, market share and competitive
edge
By Barbara Kubis-Labiak
TLFeBOOK
iii
Table of Contents
The Top 10 Global Insurance Companies
Increasing profitability, market share and competitive edge
Executive Summary 10

The global insurance market overview 10

The top 10 global insurers: company analysis 11

Chapter 1

Introduction 16

Report structure 16

Global insurance overview 16

Introducing the top 10 global insurance companies 16

Chapter 2

Global Insurance Overview 20

Summary 20

Introduction 20


Weaknesses 38

Opportunities 38

Threats 39

Company activity snapshot 40

Chapter 4

Axa 44

Summary 44

Overview 44

History 46

SWOT analysis 47

Strengths 47

Weaknesses 48

Opportunities 48

Threats 48

Company activity snapshot 49



SWOT analysis 65

Strengths 65

Weaknesses 66

Opportunities 67

Threats 68

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Company activity snapshot 68

Chapter 7

ING Groep N.V. 70

Summary 70

Overview 70

History 71

SWOT analysis 73

Strengths 74


Chapter 9

State Farm Insurance Companies 90

Summary 90

Overview 90

History 91

SWOT analysis 93

Strengths 93

Weaknesses 94

Opportunities 95

Threats 96

Company activity snapshot 97

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Chapter 10

Aviva Plc 100


Strengths 111

Weaknesses 112

Opportunities 112

Threats 112

Company activity snapshot 113

Chapter 12

The Dai-ichi Mutual Life Insurance
Company 116

Summary 116

Overview 116

History 117

SWOT analysis 118

Strengths 118

Weaknesses 119

Opportunities 120


Index 130

List of Figures
Figure 1.1:

Total life and non-life premium volume in the top five European markets, 2000—
2003 10

Figure 2.2:

Stock market indices in major stock markets in Europe, 2000—2004 21

Figure 2.3:

Total life insurance premium volume in the top five European countries, 2000—2003
24

Figure 3.4:

SWOT analysis of Allianz 37

Figure 4.5:

SWOT analysis of Axa 47

Figure 5.6:

SWOT analysis of AIG 57

Figure 6.7:


Top 10 global insurance companies, by premium income in 2000—2003 17

Table 2.2:

Total premium insurance volume by country and region, 2000—2003 23

Table 2.3:

Life insurance premium volumes by country and region, 2000—2003 25

Table 2.4:

Non-life insurance premium volumes by country and region, 2000—2003 26

Table 2.5:

Distribution of life assurance by distribution channel, 2002 28

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Executive Summary
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UK
Italy
Netherlands
France
Germany
Total premium volume, € m

Source: Swiss Re, sigma No. 3/2004 Business Insights
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
Life insurance premiums have experienced a very slow growth after the decrease in
premium income in 2001. In many countries 2003 saw a further decrease in premium
income, for example in the UK.

The compound annual growth rate for non-life insurance in Europe between 2000
and 2003 totalled 15.6%, compared with only 5.1% for life insurance during the
same period. Only one country, Germany, experienced a negative growth during this
period.

Bancassurance has been particularly successful in France, Italy and Spain. Banks in
these countries enjoy more than 50% of the distribution of life assurance products.

In Italy, for example, bancassurance accounted for 56% of the distribution of life
assurance products, with five of the top 10 life assurance competitors in the market
owned by Italian banks.

Depolarisation would encourage a competitive advantage for banks holding in the

has various subsidiaries across the United States that sell all types of insurance. It
also operates State Farm Bank, which provides additional financial services. State
Farm Insurance is headquartered in Bloomington, Illinois.

Axa capitalises on its core strengths: over 50 million clients worldwide; a 44,000-
strong captive distribution force; a global brand; unique product skills in areas such
as insurance underwriting, long-term investments, and financial advice, all on a scale
that enables Axa to leverage best practices and operations platforms across the
group.

Assicurazioni Generali has one of the strongest balance sheets in the sector and
boasts €1.7 billion in excess capital. The low level of equity exposure, limited
exposure to asset management and commercial banking and no direct exposure to
the United States or Japan gives it a very stable outlook in the current environment,
where there is a clear correlation between capital adequacy and share price
performance.

While half of its business comes from the UK, it has presence in France, the
Netherlands, Spain, Italy, Ireland, Canada and Australia. Aviva operates through its
subsidiaries under names such as Aviva, CGNU, Norwich Union, CGU, Morley
Fund Management and Delta Lloyd. It has 30 million customers.
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
For the fiscal year ended March 2004, the Dai-ichi Mutual Life Insurance Company
achieved revenues that totalled ¥5,090.4 billion ($46,990 million) a decrease of 4%
against the previous years revenues that were ¥5,255.9 billion ($47,565 billion).
Reduced insurance premiums and lower revenues from group pensions were some of

Chapter 1
Introduction

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Chapter 1 Introduction
Report structure
Global insurance overview
This chapter provides a general overview of the trends in the global insurance industry
and presents data on global insurance for the period 2000—2003, based on the Swiss Re
sigma economic research. The sigma publication series provides comprehensive
information on the international insurance markets and in-depth analyses of economic
trends and strategic issues in insurance, reinsurance and financial services, covering life
and non-life business. It is considered to be one of the most reliable and comprehensive
sources of information about insurance industry. This report uses the World Insurance
Series published regularly by Swiss Re sigma research with independent expert analysis.
The second half of the chapter addresses an important issue within the insurance
industry, namely bancassurance with statistics on the distribution of life insurance in
Europe.
Introducing the top 10 global insurance companies
The chapters that follow have been written in a similar format, providing comprehensive
information on each of the top 10 global insurers. Each chapter includes an overview of
the company’s main activities, its history, comprehensive SWOT analysis and analysis of
the current company status. The companies profiled in this report are:
1. Allianz AG
2. Axa
3. American International Group, Inc.
4. Assicurazioni Generali S.p.A.

5. ING Groep N.V. 71,707 64,209
6. Nippon Life Insurance Company 72,224 62,014
7. State Farm Insurance Companies 49,699 56,100
8. Aviva Plc 50,843 52,954
9. Zurich Financial Services 41,423 48,919
10. The Dai-ichi Mutual Life Insurance
Company (year end in March) 47,565 46,990
Source: Annual report analysis Business Insights
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Chapter 2
Global Insurance Overview
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Chapter 2 Global Insurance Overview
Summary

The year 2003 has shown some signs of recovery after two years of worldwide
recession and growth rates are gradually picking up.

The world insurance premium volumes, after a drop from $2,444,903 in 2000 to

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falling by 58.4% in the period 1999—2002 and the average fall across the five countries’
indices was 44.9%. The Spanish General Index comparatively performed the best, falling
37.1% in the period 1999—2002.
2003, however, showed some signs of recovery, something that all investors have been
looking forward to. After two years of worldwide recession growth rates are gradually
picking up.
Figure 2.2: Stock market indices in major stock markets in Europe, 2000—
2004

Source: Euroland stockmarket indices Business Insights
Life and non-life insurance markets worldwide
Definitions
The most important terms used in this chapter are as follows:

Direct insurance: insurance contract between an individual (or a company) and
an insurer;

total insurance: direct insurance premiums plus reinsurance accepted;

gross insurance: insurance premiums before ceding any portion of them (and
their risks) in reinsurance;
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net insurance: insurance premiums after ceding some risk to reinsurers;

written premiums: premium income allocated to the current accounting year,

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evident that the declines in stock markets worldwide had a direct impact on world
insurance premiums, resulting in either a decrease in premiums or a sluggish growth.
Table 2.2: Total premium insurance volume by country and region, 2000—
2003
Euros 2000 2001 2002 2003 CAGR
UK 232,099 216,666 224,357 214,870 -2.5%
Germany 134,274 138,333 144,176 150,640 3.9%
France 131,192 128,605 132,883 144,351 3.2%
Italy 68,436 77,627 89,260 98,563 12.9%
Netherlands 39,981 43,495 42,218 44,330 3.5%
Spain 37,635 39,392 48,214 41,462 3.3%
Belgium 21,597 22,934 25,354 29,821 11.4%
Sweden 18,130 17,406 17,239 18,703 1%
Ireland 17,065 12,116 13,604 15,282 -3.6%
Denmark 11,229 12,499 13,809 14,819 9.7%
Finland 12,128 12,019 12,345 12,456 0.9%
Norway 7,854 8,175 7,917 11,177 12.5%
Portugal 6,860 7,931 8,491 9,534 11.6%
Total of above 738,480 737,198 779,867 806,009 3%

US$
United States 859,476 904,021 1,005,985 1,055,498 7.1%
Europe 786,089 762,398 846,697 1,022,158 9.1%
Japan 503,712 445,845 445,940 478,865 -1.7%
Africa 27,145 24,551 24,805 30,968 4.5%
World 2,444,903 2,408,252 2,632,473 2,940,670 6.3%
Note: The values in Euro for UK, Sweden, Denmark and Norway are converted from local
currency into Euro, based on end of year 2003 exchange rate
Source: Swiss Re, sigma No. 3/2004 (year 2000 from sigma No. 6/2002) Business Insights

Life insurance premiums have experienced a very slow growth after the decrease in
premium income in 2001. In many cases the year 2003 saw a further decrease in
premium income, for example, in the UK. This trend is not only because of the recession
of 2001, but also due to the persistent low interest rates resulting in life insurers offering
lower returns. Such trends have been observed in the traditional life insurance sector, as
well as in unit-linked insurance. According to Swiss Re Economic Research &
Consulting data, unit linked insurance experienced negative real growth rate between
2001 and 2003 in France and Spain, and the UK and Italy saw a very slight increase in
2003.
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