THE LIFE/HEALTH INSURANCE INDUSTRY
Whether measured by premium income or by assets, traditional life insurance is no longer the primary business of many companies in the life/health insurance industry. Today, the emphasis has shifted to the underwriting of annuities. Annuities are contracts that accumulate funds and/or pay out a fixed or variable income stream. An income stream can be for a fixed period of time or over the lifetimes of the contract holder and his or her beneficiaries.
Nevertheless, traditional life insurance products such as universal life and term life for individuals as well as group life remain an important part of the business, as do disability income and health insurance.
Life insurers invest primarily in corporate bonds but also significantly in corporate equities. Besides annuities and life insurance products, life insurers may offer other types of financial services such as asset management. | | | - Fifteen percent of husbands and 28 percent of wives have no life insurance.
- 6 million households (10 percent of families with children under age 18) have no life insurance protection.
- The percentage of families with dependent children that admit they'll have immediate trouble with everyday living expenses is 22 percent. Another 26 percent say that if a primary wage earner dies they'll only be able to cover expenses for a few months.
- Insured husbands in the U.S. carry enough life insurance to replace their income for only 4.2 years, and wives for only 4.9 years. To meet the expert recommendation of having enough life insurance to replace income for a term of 7 to 10 years, the typical married couple would need to double its current coverage.
- The percentage of married parents who believe their current life insurance protection is inadequate is 56 percent.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | TOP TWENTY U.S. LIFE/HEALTH INSURANCE GROUPS BY REVENUES, 2007 (1)
($ millions)
Rank |
Group |
Revenues |
Assets | | 1 | MetLife | $53,150 | $558,562 | | 2 | Prudential Financial | 34,401 | 485,814 | | 3 | New York Life Insurance | 29,280 | 179,621 | | 4 | TIAA-CREF | 27,526 | 420,315 | | 5 | Massachusetts Mutual Life Insurance | 25,268 | 172,911 | | 6 | Northwestern Mutual | 22,597 | 156,547 | | 7 | AFLAC | 15,393 | 65,805 | | 8 | Genworth Financial | 11,443 | 114,315 | | 9 | Principal Financial | 10,907 | 154,520 | | 10 | Lincoln National | 10,738 | 191,435 | | 11 | Unum Group | 10,567 | 52,433 | | 12 | Guardian Life Insurance Company of America | 10,071 | 41,319 | | 13 | Thrivent Financial for Lutherans | 6,133 | 57,412 | | 14 | Pacific Life | 5,325 | 111,024 | | 15 | Western & Southern Financial Group | 4,811 | 30,941 | | 16 | Conseco | 4,572 | 33,515 | | 17 | Mutual of Omaha Insurance | 4,337 | 17,746 | | 18 | CUNA Mutual Group | 3,850 | 14,946 | | 19 | Torchmark | 3,487 | 15,241 | | 20 | American National Insurance | 3,071 | 18,465 | | (1) Revenues for insurance companies include premium and annuity income, investment income and capital gains or losses but exclude deposits. Source: Fortune. | | | DISTRIBUTION CHANNELS
Life insurance was once sold primarily by career life agents, captive agents that represent a single insurance company, and by independent agents, who represent several insurers. Now, life insurance is also sold directly to the public by mail, telephone and through the Internet. In addition, in the 1980s insurers began to market annuities and term life insurance through banks and financial advisors, professional groups and the workplace. A large portion of variable annuities, and a small portion of fixed annuities, are sold by stockbrokers. By 2007 affiliated (i.e., captive) agents held 35 percent of new individual life insurance sales, independent agents held 58 percent and others, including stockbrokers, accounted for the remaining 7 percent, according to LIMRA.
| | U.S. INDIVIDUAL LIFE MARKET SHARE BY DISTRIBUTION CHANNEL, 1999-2007
(Based on first year collected premium)
(1) Includes career, multiline exclusive and home service agents.
(2) Includes brokers and personal producing general agents.
(3) Includes stockbrokers, financial institution, worksite and other channels.
(4) Estimate.
Source: LIMRA's U.S. Individual Life Insurance Sales Studies, LIMRA estimates.
| | WORKSITE LIFE INSURANCE COMPANY SALES
BY LINE OF BUSINESS, 2007 (1)
- Worksite marketing is the selling of voluntary (employee-paid) insurance and financial products at the worksite. The products may be on either an individual or group platform and are usually paid through periodic payroll deductions.
- Worksite sales of life and health insurance in 2007 totaled $5.0 billion, up almost 7 percent from 2006.
(1) Short-term and long-term disability.
Source: East Bridge Consultants.
|
| | TOP TEN LIFE INSURANCE GROUPS BY NUMBER OF INDIVIDUAL TERM LIFE INSURANCE POLICIES ISSUED, 2007
Rank |
Group |
Number of policies issued |
Amount of insurance issued ($000) |
Average amount issued per policy | | 1 | State Farm | 351,536 | $72,118,322 | $205,152 | | 2 | American International Group (AIG) (1) | 342,207 | 120,723,359 | 352,779 | | 3 | Direct General Group | 308,999 | 3,544,855 | 11,472 | | 4 | Citigroup | 259,950 | 77,864,529 | 299,537 | | 5 | Allstate Insurance | 247,889 | 45,958,414 | 185,399 | | 6 | Liberty National | 242,010 | 6,723,301 | 27,781 | | 7 | American Family Insurance Group | 183,214 | 18,318,278 | 99,983 | | 8 | Zurich Insurance Group | 137,464 | 25,539,661 | 185,792 | | 9 | Old Mutual | 127,472 | 17,111,084 | 134,234 | | 10 | Genworth Financial Group | 123,832 | 53,711,410 | 433,744 | | (1) In 2008 AIG ceded 79.9 percent of its ownership to the federal government in exchange for an $85 billion loan.
Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC. | | | TOP TEN LIFE INSURANCE GROUPS BY NUMBER OF INDIVIDUAL WHOLE LIFE AND ENDOWMENT INSURANCE POLICIES ISSUED, 2007 (1)
Rank |
Group |
Number of policies issued |
Amount of insurance issued ($000) |
Average amount issued per policy | | 1 | Liberty National | 745,861 | $13,669,254 | $18,327 | | 2 | American International Group (AIG) (2) | 482,321 | 24,420,484 | 50,631 | | 3 | UnumProvident Life | 307,531 | 7,445,766 | 24,211 | | 4 | State Farm | 265,176 | 14,695,593 | 55,418 | | 5 | AEGON USA Incorporated | 244,820 | 21,223,344 | 86,690 | | 6 | Mutual of Omaha | 189,058 | 4,481,512 | 23,704 | | 7 | Metropolitan Group | 165,045 | 29,875,207 | 181,012 | | 8 | New York Life | 164,275 | 31,666,114 | 192,763 | | 9 | Conseco | 135,658 | 2,438,768 | 17,977 | | 10 | Northwestern Mutual | 134,280 | 32,895,264 | 244,975 | (1) Benefit is payable either at death or at stated date if policyholder is still alive on that date.
(2) In 2008 AIG ceded 79.9 percent of its ownership to the federal government in exchange for an $85 billion loan.
Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC. | |
|
