American insurance business differs from others in its great scope and is second to none in the world. American insurance companies control approximately 50% of all insurance market of developed countries. There are more than 8 thousand property insurance companies in the USA and approximately 20 ny insurance companies which insure life. A vast majority of these companies went back in New York.
In New York, like in the whole USA, there are 2 types of insurance companies: stock companies and loan and fund associations. State insurance companies don’t exist. Shares of stock companies can buy both physical and juridical person.
Historically in the USA insurance companies were loan and fund associations. Traditionally they are less in size than stock companies.
NY insurance companies like other insurance companies do 3 types of insurance:
- life and health insurance, medical, pension etc.;
- commercial (a wide range);
- personal (home, car, property insurance of citizens).
Insurance industry in the USA is the only one which doesn’t fall within antimonopoly legislation.
Representatives of 3 consulting companies: A.M. Best, Moody S, Standart & Poors carefully analyze the activity of all insurance agents in the USA; the condition of insurance companies and give the catalogues of their work every quarter. They publish in mass media the official insurance companies rates of reliability for client and data of their solvency.
Some separate companies, especially broker, have special subordinate unit for analysis of activity of other companies. Also the main factors of carrying out such analysis re: financial condition; payments for legal actions and service level; safety and prevention of losses; work flexibility in company; service price (minimal tariff rate), level of losses, incomes and the rate of return from investments and level of receivables are considered to be the criterias of work effectiveness of ny insurance companies.
One of the most important peculiarities of the biggest ny insurance companies is the condition that by virtue of high prestige of insurance companies the multibillion costs pass under their management, which belong to different pension funds. The task of insurance companies in this case is to provide the preservation and growth of costs by wise investment policy. For running those means insurance companies charge the commission fee. And even the moderate sizes – 0,1% from managed sum bring million $ of income.
Investments have a great importance for American life insurance companies. The statistics says that in 1984 insurance expenses and payments of insurance premiums from life insurance companies was 118%. While the income of those companies was $ 6,9 billion. It’s absolutely clear that they were received not from the direct insurance operations but from investments.
But there is another important thing. The great investment sources transform insurance companies into very necessary centres of financial control of all industrial corporations.
Financial relations are strengthening with personal. Due to incomplete data, the insurance agents in the USA are in 27 from 100 boards of directors of American industrial corporations.
As a result because of such solid base in which insurance companies stand, let us be confident that the workers will have a brilliant future.