Life Insurance Carriers Industry Profile

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).

Life insurance accounted for 45% of global premiums in 2019, with a 4.4% growth from 2018 to 2019, according to McKinsey. Developing economies in the Asia Pacific region had the fastest premium growth during the period, at 10%.

The US life insurance industry includes about 8,600 establishments (single-location companies and units of multi-location companies) with annual revenue of about $500 billion.

COMPETITIVE LANDSCAPE

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 50 largest firms generate about 95% 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 ...