Life Insurance in the US, Key Trends and Opportunities to 2017

Date: 2015-09

In terms of gross written premium, the life insurance segment was the largest in the US insurance industry during the review period (2008โˆ’2012), accounting for 35.7% of the total written premiums generated in 2012. The total written premium value of the segment increased at a CAGR of 0.1% during the review period. The increase was attributed to a recovery employment levels which heightened the demand for group life insurance . However, low investment returns represented a loss of earnings in product categories such as term life. According to the Federal Reserve, since 1930, life and annuity insurers have been the largest investors in the US capital market, and consequently are highly exposed to bond financing and real estate investments. As a result, the investment incomes of life insurers declined sharply in 2009 due to the collapse of the financial market and the subprime mortgage crisis. Volatility in the stock market reduced demand for annuity products.

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