Leading insurance companies globally 2022, by revenue

In 2022, American multinational holding company Berkshire Hathaway was the largest global insurance company, with revenues over 302 billion U.S. dollars.

The insurance industry

Insurance is the transfer of the risk of a potential loss from one entity to another in exchange for payment. It is a form of risk management used to ensure some degree of financial security in the face of uncertain loss. The individual or institution that purchases the insurance policy from the supplying company is known as the insured or the policy holder. The amount of money charged to the organization or person for the insurance coverage is known as the premium.

The practice which determines the level of risk that exists, and therefore the value of premium for the coverage, is carried out as part of the risk management processes. If a major event occurs, natural catastrophic events for example, then insurers must cover the cost. It may be the case the insurer has a number of insured entities, and has a high level of exposure. This is why insurance involves pooling funds from many different sources in order that funds are sufficient to pay for the losses that could be incurred in some cases. In order that risk may be shared out, and some of the financial burden may be divided, insurance companies often transfer some of the risk to reinsurance companies, who purchase insurance from the insurance company. This passing of the risk allows insurers to issue policies with higher limits than would otherwise be allowed, making it able to take on more risk because of the displacement of the risk that has been passed on to the reinsurer.