Risky business: Regulation and consolidation will disrupt industry performance

Homeowners' insurance protects households against property damage from natural causes or theft, as well as liability from inflicting bodily injury or property damage on others. Demand is generally resistant to economic fluctuations because it is considered essential in providing financial protection against the inherent risks of homeownership. While the housing market experienced a major setback following the subprime mortgage crisis, it has since improved markedly, following the broader economy. Competition is expected to remain fierce and operator-level performance will depend heavily on underwriting activity...read more.

Industry Statistics & Market Size
Revenue
$95bn
Annual Growth 12-17
2.2%
Forecast Growth 17-22
Profit
Employment
80,594
Businesses
2,123
What Our Customers Say

Industry Threats & Opportunities

  • Increased merger and acquisition activity is anticipated to disrupt industry competitiveness
  • Rising barriers to entry resulted in a period of high merger and acquisition activity
  • High-risk coastal regions, continue to expose industry insurers to higher risks
  • Industry Report - Industry Products Chapter

    This industry only provides homeowners' insurance products, though policies differ by coverage. As a result, products are segmented based on the type of coverage provided.HO-3An HO-3 policy provides coverage for all home damages except for those specifically excluded in the policy. Exclusions include flood damages, which are never protected by homeowners' insurance. Other exclusions may include earthquakes, war, neglect and other damages that vary for each policyholder. Personal property is also only covered if specified by the policy. Demand for HO-3 policies is typically stable. This product segment is estimated to account for 80.5% of industry revenue...purchase to read more.

    Additional Insights for the Homeowners' Insurance Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Homeowners' Insurance Industry are

  • Ensure pricing policy is appropriate
  • Superior financial management and debt management
  • Ability to effectively manage risk
  • IBISWorld analysts also discuss how external factors such as Number of households and House price index in the Homeowners' Insurance industry impact industry performance..

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    What is the Homeowners' Insurance Industry?

    This industry includes insurers that underwrite (e.g. assume and manage risk) homeowners’ insurance policies. Homeowners’ insurance protects households against property damage or losses due to catastrophic disasters, theft and other causes. These policies also protect against personal liability that may result from bodily injury that occurs on one’s property.

    Industry Products
  • HO-3
  • HO-5
  • HO-2
  • HO-1
  • HO-8
  • Industry Activities
  • Assuming and managing property damage risks due to losses from catastrophic weather, fire, theft and other causes
  • Assuming and managing household personal and legal liabilities from bodily injury and property damage
  • Assuming and managing identity theft, credit card and other household risks
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Number of households
  • House price index
  • S&P 500
  • Natural disaster index
  • Regulation for the Property, Casualty and Direct Insurance Industry
  • Yield on 10-year Treasury note

  • Current Performance
  • Weak demand and underwriting losses force higher prices
  • Investment conditions
  • Industry landscape
  • Chart: Revenue Growth

  • Industry Outlook
  • Catastrophic losses and profitability
  • Greater government involvement
  • Further consolidation
  • Table: Homeowners' Insurance Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Homeowners' Insurance Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Private Equity, Hedge Funds & Investment Vehicles
  • Real Estate Investment Trusts
  • Reinsurance Carriers
  • Stock & Commodity Exchanges
  • Venture Capital & Principal Trading

  • Products & Services
  • HO-3
  • HO-5
  • HO-2
  • HO-1
  • HO-8
  • Chart: Homeowners' Insurance Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Consumers aged under 35
  • Consumers aged 65 and older
  • Consumers aged 55 to 64
  • Consumers aged 45 to 54
  • Consumers aged 35 to 44
  • Chart: Major Market Segmentation for the Homeowners' Insurance Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitLosses and loss adjustment expenses ratioHomeowners’ expense ratioOther costs
  • Chart: Cost Structure Benchmarking – Sector vs Homeowners' Insurance

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Homeowners' Insurance Industry

  • Industry Globalization
    State Farm Insurance CompaniesAllstate Insurance CompanyLiberty Mutual Insurance GroupFarmers Insurance Group
  • Table: State Farm Insurance Companies - financial performance
  • Table: Allstate Insurance Company - financial performance
  • Table: Liberty Mutual Insurance Group - financial performance
  • Table: Farmers Insurance Group - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Homeowners' Insurance Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Homeowners' Insurance Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Number of households (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Capacity
  • The supply of insurance or the maximum amount of insurance a company or market can underwrite, which is determined by a firm's financial strength or surplus.
  • Combined Ratio
  • A measurement of a firm's underwriting performance and profitability; it equals the loss ratio plus the expense ratio.
  • Expense Ratio
  • Underwriting or operation expenses as a percentage of earned premiums, indicating the percentage of premium income that was consumed in writing insurance business.
  • Loss Ratio
  • The percentage of premiums earned that were paid out as claims; it equals loss-incurred and loss-adjusted expenses (LLAE) divided by earned premiums.
  • Underwriting
  • The process where insurers assess the risks to insure and decide how much to charge for those risks.
  • Why buy this report?

    IBISWorld’s industry research report on Homeowners' Insurance can be used to help you understand the industry’s market size, growth potential and major companies. Five-year forecasts provide insight into the industry’s prospects, so you can make decisions with confidence. This information is perfectly suited to informing your business plans, pitch books, benchmarking and SWOT analysis.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Homeowners' Insurance:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Homeowners' Insurance market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Homeowners' Insurance, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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