Life Insurance Carriers
Companies in this industry underwrite life insurance and related products including annuities, long-term care, disability, and accidental death and dismemberment policies. Major companies include MetLife, New York Life, and Prudential Financial (all based in the US), as well as AEGON (the Netherlands), AXA (France), Nippon Life (Japan), and Prudential (UK).
Global life insurance premiums totaled about $2.6 trillion in 2016, up 2.5% compared to 2015, when premiums grew by 4.4%, according to Swiss Re. A return to growth has pushed global life premiums above the pre-financial crisis average. In emerging markets, life premiums grew 17% in 2016, compared to 11.7% the prior year. The rise was mainly driven by China, as well as India, Indonesia, and Vietnam. Premiums in advanced markets fell by 0.5%.
The US life insurance industry includes about 8,000 establishments (single-location companies and units of multi-location companies) with annual revenue of about $550 billion.
Demand is driven by demographics and the economy. The profitability of individual companies depends on effective marketing and investment strategies and on the ability to accurately estimate future payments. Large companies take advantage of economies of scale in administration and in access to capital, as well as advertising and marketing. Small companies can compete successfully by providing specialized services to communities and organizations, such as current and former military personnel, church affiliations, and fraternal organizations. The US industry is highly concentrated: the largest 50 firms generate more than 90% of industry revenue.
Carriers face an aging population, which could result in rising claims. Success may depend on new financial products marketed to a demographic that is more dependent on retirement assets than previous generations.
Many life insurance companies are mutual companies rather than publicly traded companies. A mutual company does not issue stock and is owned by its customers. In some states, savings banks can also sell life insurance policies, which may be less expensive than products offered through insurance agents or brokers. Insurers may also compete with asset managers, unaffiliated broker-dealers, and other financial service companies.
Products, Operations & Technology
Major products include annuities (about 50% of industry revenue) and life insurance policies (about 30%). Other products include accident, supplemental
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms