While it may seem a simple task to name the world’s largest insurance companies, given the increasing overlap and blurred distinctions between insurance and financial investment companies, there is some differing of opinions as to who really is the biggest. Add in the insurance and banking meltdown of 2008/2009, which broke up, merged and destroyed several companies, the top companies have and continue to fluctuate.
According to an article in the LA Times and CNN, as of March 2009, the largest insurance company in the world was AIG, the now much humbled giant. However, even back in April 2008, the Forbes Global 2000 gave top honours to ING, based in the Netherlands, which ranked ninth, while AIG came in at number eighteen, behind both ING and Germany-based insurance giant Allianz. The Forbes Global 2000 is not strictly about size, however; and uses a formula based on profits, revenue, assets and market value to rank worldwide companies. According to Forbes’ figures, AIG did have a higher market value than ING; on the other hand, ING outdid AIG on revenue, profits and assets.
The post-meltdown insurance landscape is much different. The Forbes Global 2000 one year later, in April 2009, shows ING plummeting from ninth place in 2008 down to 456th place in 2009. It should come as no surprise to anyone with a television or radio that AIG also dropped off a cliff, from 18th to 968th. In 2008, 3 insurance companies (those mentioned above) had cracked the top twenty of global powerhouse companies. In April 2009, the highest ranking insurer was in 45th place – the Generali Group out of Italy. The top US based insurer was MetLife in ninetieth place among all industries, and fourth among insurers. Using the Forbes list as a ranking, the top ten insurance companies worldwide are (the ranking in parentheses refers to their Forbes overall ranking):
1. Generali Group – Italy (45th)
2. China Life Insurance – China (72nd)
3. Munich Re – Germany (75th)
4. MetLife – United States (90th)
5. Zurich Financial Services – Switzerland (96th)
6. AXA Group – France (99th)
7. Travelers – United States (131st)
8. Ping An Insurance Group – China (141st)
9. Tokio Marine Insurance – Japan (148th)
10. CNP Assurances – France (181st)
Of course, the Forbes Global 2000 doesn’t claim to be the largest companies, but rather the best companies. Most articles that refer to AIG as the largest insurance company bestow upon it that title based on the number of policy holders. It is arguable whether this is a true measure of the size of the company – do you assess the size of a company based on the number of customers, the value of sales, or the total of its assets? The Global 2000 uses some of these factors. Other lists may use other factors.
The other drawback on the Forbes list is that the companies are ranked by parent companies. Parent companies often own a number of subsidiaries in various industries. For example, Berkshire Hathaway is sometimes listed as one of the largest insurance companies in the US and in the world. Berkshire Hathaway is undoubtedly one of the largest companies in the world, with a 2008 ranking of tenth and 2009 of nineteenth. However, although Berkshire Hathaway does have holdings in insurance, it also has holdings in manufacturing, finance, retail and service sectors, and energy. The Forbes list does not break it down into its subsidiaries and rank them individually by industry. One of Berkshire Hathaway’s insurance holdings is Geico, which claims over $15 billion in assets, according to their website. There are a handful of insurance companies with assets at this level or lower on the Forbes 2000 list, all of the top companies have much higher asset values.
Ref: forbes.com, geico.com, cnn.com