Mr. Cohen: Non-life insurance, which many people refer to as property and casualty insurance, includes a lot of different lines of business, both personal insurance and commercial insurance. Essentially, it's companies that are taking either property risk or third party risk, such as liability insurance or workers' comp insurance, rather than mortality risk or health risk. The size of the market is fairly substantial. Premiums written in 1999 were $287 billion, and that is actually split fairly evenly between commercial lines and personal lines. The largest single line of insurance is auto insurance. That includes both property and liability coverage, but auto insurance represents about 40% of the total premiums of the industry. So it's a very important line of business. The other thing I would say is that the industry is not particularly concentrated. There are just over 1,000 non-life insurance organizations in the US, and in most lines of business there is very little price leadership. So it's fairly fragmented and not very concentrated; it encompasses a lot of different lines of business, ranging from auto insurance to medical malpractice insurance to workers' compensation to homeowners. So it encompasses a lot of different types of risks.
TWST: Jay, why did you choose the word 'organizations' versus businesses
or companies?
Mr. Cohen: Good question ' very astute. There is something called an
insurance company, which is the regulated entity. Many insurance
organizations own more than one insurance company. For example, there
happen to be about 2,500 insurance companies in the US, but most of
those are subsidiaries of larger organizations. So I broke it down by
the organization rather than the company.
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