Insurance Initiative

The Chicago Fed Insurance Initiative provides expert analysis of policy issues related to the insurance industry for the Federal Reserve System. The Insurance Initiative was established in 2011 and is motivated by the importance of the insurance industry in the overall economy as well as by the key role the industry plays for households and financial markets.

The Economy

• The insurance industry accounts for approximately 7.6% of annual GDP.
• The industry employs 2.6 million individuals in the U.S.

Households

• 60% of U.S. households in 2013 had some form of life insurance.
• Life insurers paid out $425 billion in life insurance and annuity benefits in 2016.
• Property and casualty insurers paid out $378 billion in claims in 2016, including $23 billion to cover losses from catastrophes.

Financial Sector

• Insurance companies are a critical source of funding for corporations, as well as for city and state governments: Insurance companies hold 25% of all corporate and foreign bonds and 13% of all municipal debt.

The Insurance Initiative produces regular reports on industry developments that are shared within the Federal Reserve System. In addition, Initiative staff author research and policy papers that are shared publicly. 

The Initiative examines insurance regulatory filings together with other financial data to conduct much of its analysis. In addition, Initiative staff gain insights through regular discussions with representatives of several insurance firms, who together represent 32 percent of life insurance assets and 10 percent of property and casualty assets. These firms are a mix of mutual and publicly traded companies. Individuals from the Chicago Fed, the New York Fed, and the Board of Governors participate in these discussions. Talking to a broad range of industry and financial sector experts provides a variety of perspectives on the issues and risks facing the industry and ensures that the Initiative’s work takes into account multiple viewpoints.