Life Insurance Carriers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 900 life insurance carriers underwrite annuities and policies for life insurance, disability income, and accidental death and dismemberment. Life insurance policies pay money to beneficiaries when a policyholder dies in exchange for a premium payment or series of payments. Annuities are financial contracts with insurers that provide a series of income payments at regular intervals in exchange for premiums. When assessing risk, underwriters consider a range of factors, including an applicant’s age, gender, medical history, financial profile, foreign travel, vocations, and alcohol, drug, and tobacco use. Life insurance companies invest a portion of premiums in assets with features that align with the characteristics of the policies they sell.

Investment Risk

Because life insurance companies invest premiums to ensure they have sufficient funds to satisfy future claims on and withdrawals from policies, firms are exposed to financial risk.

Market Maturity

The US life insurance market is mature and characterized by low growth.

Industry size & Structure

The average life insurance company employs between 300 and 400 workers and generates just over $630 million annually.

    • The life insurance industry consists of about 900 firms that employ over 320,000 workers and generate over $560 billion annually.
    • Companies that generate more than $100 million annually account for 20.7% of firms and 99.3% of industry sales.
    • The industry is highly concentrated; the top 50 companies account for more than 90% of industry revenue.
    • About 14% of life insurance companies operating in the US are foreign owned, according to the American Council of Life Insurers (ACLI).
    • Large companies include MetLife, Prudential Financial, New York Life Insurance, and The Northwestern Mutual Life Insurance Company.
                        Industry Forecast
                        Life Insurance Carriers Industry Growth
                        Source: Vertical IQ and Inforum

                        Recent Developments

                        Jun 16, 2024 - Labor Costs Increase
                        • Life insurance carrier industry employment was unchanged during the first four months of 2024, according to the US Bureau of Labor Statistics (BLS). Average hourly earnings of production and nonsupervisory employees increased slightly during the first four months of 2024, according to the BLS. Life insurance industry sales are forecast to grow at a 6.52% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
                        • US annuity sales increased 23% year over year in 2023 to a record-high $385.4 billion, according to the Life Insurance Marketing and Research Association (LIMRA) US Individual Annuity Sales Survey. All fixed annuity product lines set sales records in 2024. Increasing interest rates have made annuities very attractive to a larger group of investors who are served by independent advisors and broker dealers,” said Bryan Hodgens, head of LIMRA research.
                        • About 41% of adults surveyed by the Life Insurance Marketing and Research Association (LIMRA) said that they do not have sufficient life insurance coverage. Some 44% of American households would encounter significant financial difficulties within six months if they lost the primary wage earner in their family, and 28% would reach this point in one month or less, according to LIMRA. About 82% of Americans overestimate the cost of a policy, with 28.4% incorrectly guessing the cost to be three times as high.
                        • Term life insurance accounted for 39.3% of all life insurance purchases in 2022, according to the American Council of Life Insurers. Term life insurance represented 70.5% of the total face amount issued for individual life policies, totaling $1.3 trillion. Permanent life insurance policies made up 60.7% of all life insurance purchases.
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