U.S. Companies Spend Most on Liability Insurance

Premiums for liability coverage average $1.75 for every $1,000 in revenue, more than for any other type of coverage.

Companies shopping in the $237 billion U.S. commercial-insurance market are purchasing liability products more than any other type of coverage, a recent study shows.

In its latest sigma study, titled "Insuring Ever-Evolving Commercial Risks," Swiss Re notes that corporate insurance demand varies by company size and industry, but overall, premiums for liability coverages averaged $1.75 per every $1,000 in revenue for companies across nine industries in 2010, more than any other commercial coverage.

Swiss Re also analyzed demand based on company size, finding that large companies purchase higher limits than smaller companies, but spend less on insurance as a percentage of revenue: $3 per $1,000 in  revenue in 2010 for large companies versus $7 per $1,000 for small companies.

Swiss Re says a contributing factor to the difference is that medium frequency and severity risks are often self-insured by large companies, which might dedicate an entire department to risk strategy, while small companies may have to outsource risk management to brokers or consultants.

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