P&C insurance contracts insure the policyholders from liability, risks to property, and casualty, such as damages to property due to calamities or from legal liabilities. P&C insurance is also referred to as non-life insurance. Unlike long-term life insurance policies, P&C contracts can be short-term and long-term in nature, also known as short-tailed and long-tailed contracts.
The various types of P&C business lines are outlined in the chart above. In many cases, P&C products have commoditized characteristics that result in intense competition in the market and business cycles. AIG (AIG) and ACE (ACE) are key players in the P&C space.
Some insurers may undertake only life or P&C insurance business, and other insurers manage both types of businesses, which make them a composite or a multi-line insurer. ETFs that focus on the insurance sector include the SPDR S&P Insurance ETF (KIE).