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U.S. $625,838 $517,074 $1,142,912
Japan 100,523 375,958 476,481
U.K. 100,629 199,612 300,241
France 68,162 154,058 222,220
Germany 107,026 90,225 197,251
Italy 47,453 91,740 139,194
South Korea 24,085 58,848 82,933
Canada 44,267 34,456 34,456
Netherlands 29,159 31,914s 61,073
Spains 34,757 25,518 60,275

 Swiss Re, sigma, No. 5/2006
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he basics of insurance are simple - one company offers a guaranteed future payment for a contracted event.
he company offering the guarantee charges a premium for insuring against the event's occurence - in doing so,
the insurance company is protecting the client against certain circumstances, say physical capital loss due to a
natural disaster. he insurance company assumes all financial responsibility associated with the client¶s losses.

Where the business gets complicated is in the calculations of premiums. his involves the use of complex
stochastic probabilty models meant to simulate the likelihood of a given event¶s occurrence. Not all events are
created equal, from an insurance perspective - for some types of insurance a company can accurately predict the
probability of occurence (say, automobile insurance, which has such a large sample to study that companies can
make accurate predictions and judgments about demographic groups). For events that are harder to predict (say,
the future value a å
 
 
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policies.

he insurance sector itself is segmented into four distinct sub-sectors: 
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 , and Miscellaneous Insurance.

Insurance Industry Sub-Sectors

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›ife insurance deals with policies that are written to hedge against the risk of death, accidental death, and in
some cases, sickness. In many cases, liability to the insurer is limited based on cases dealing with suicide, war,
riot, and fraud.

Companies within the ›ife Insurance Sub-Sector:

 
  

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Casualty insurance deals with policies that are written to hedge against the risk of unforeseen accidents. Some
examples are insurance policies for auto accidents or losses incurred at sea (Marine Insurance). In general,
casualty insurance hedges against risks associated with liability and crime.

Companies within the Casualty and Property Insurance Sub-Sector:



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*ealth insurance deals with policies that are written to hedge against the risk of unexpected or unexpectedly high
health costs. Interestingly, the insurer of health insurance policy can either be from the private sector or the public
sector, subsidized by taxes.

Companies within the Accident and *ealth Insurance Sub-Sector:

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Assurance/guarantor companies provide insurance against default on credit instruments. hey collect premiums
to insure bonds against defaults and/or losses in value through insurance policies generally called "insurance
enhancement products". Some examples are:

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Companies within the Misellaneous Insurance Sub-Sector:
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