Insurance in the United States is big business: Insurance premiums (not counting health insurance) totaled $1.1 trillion in 2012. To protect themselves against large claims, many insurance companies have long bought insurance from other insurers to share their risks. In a new wrinkle, some life insurers have started setting up "captive" insurance companies to, in effect, buy insurance from themselves — a practice that critics say makes these companies look healthier than they really are. The cover story in the latest issue of Econ Focus looks at these and other questions about the business of insurance.
Also in this issue:
Econ Focus is the economics magazine of the Federal Reserve Bank of Richmond. It covers economic issues affecting the Fifth Federal Reserve District (the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia) and the nation.
For a free subscription to Econ Focus or for copies of the magazine, contact the Bank's Research Publications division at (800) 322-0565 or subscribe online. The articles are available online at http://www.richmondfed.org/publications/research/index.cfm.
The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.