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
Recent Developments
Jul 12, 2024 - Prices Decrease
- Life insurance carriers decreased prices slightly during the first five months of 2024, according to the US Bureau of Labor Statistics (BLS). Life insurance carrier industry employment decreased slightly during the first five months of 2024, according to the BLS. Average hourly earnings of production and nonsupervisory employees increased slightly during the first five 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.
- Insurers are exploring the use of AI to predict an individual's death date, according to Forbes. The death date calculation is traditionally rooted in factors like age, medical history, lifestyle choices, and family health history, according to Forbes, but the integration of AI and machine learning is changing the process. AI systems analyze vast and complex datasets to identify patterns and correlations that might elude human analysts. Some insurance companies are experimenting with AI to analyze medical images like MRI scans to detect early signs of life-threatening diseases. Other companies are using wearable technology data to monitor policyholders' health and lifestyle in real-time, potentially offering more accurate life expectancy predictions. Using AI to predict life expectancy is fraught with ethical challenges, according to Forbes. Collecting and analyzing detailed health and lifestyle data invades personal privacy, and there are valid concerns about how this data is stored, used, and protected. Bias within AI systems is also possible as results depend on the training data used. AI results may be skewed if the data contains historical or implicit biases, leading to unfair policy rates or coverage denial for certain groups of people.
- 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 2023. 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.
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