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Life Insurance & Annuities in the US - Industry Market Research Report

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  • 58 Pages
  • January 2023
  • Region: United States
  • IBISWorld
  • ID: 1208446

Extra precaution: Widening credit spreads with increase investment income

The Life Insurance and Annuities industry operates with a low level of market share concentration. The top four companies are estimated to account for 11.8% of industry revenue in 2019. The level of concentration within the industry increased slightly in recent years. The top players in the industry are Northwestern Mutual, Prudential Financial, MetLife and Massachusetts Mutual Life Insurance Company.

High capital intensity raises barriers to entry

· The Life Insurance and Annuities industry has significant barriers to entry. Potentially the highest barrier to overcome, a prospective entrant must first raise capital to run operations. After sufficient capital is accumulated, new enterprises must build a distribution network that uses both in-house and independent agents and brokers to sell their products. The business must also hire highly trained actuaries and underwriters who are capable of competitively pricing policies and minimizing risks. The extensive amount of regulation that the industry is subject to presents another barrier to entry for potential operators to overcome. The majority of government oversight is conducted on a state level, which makes it difficult for operators to operate in multiple jurisdictions throughout the country. Additionally, operators are required to meet risk-based capital requirements, which depend on asset risk, insurance liabilities and premium income.

Insurers compete heavily to differentiate products

· The majority of products within the industry are similar, so it is important for insurers to be able to competitively price products. Additionally, insurers must be able to differentiate themselves from their competitors. As a result, insurers often compete on quality of service and rates of return on their policies. It is also important for insurers to maintain strong brand awareness and financial strength, particularly after the most recent recession. Companies must continuously upgrade and improve technological systems to reduce operational costs and improve customer sentiment. Brand awareness and reputation are also crucial competitive factors.

Operators within this industry are primarily engaged in accepting liability under annuities and life, disability income and accidental death and dismemberment insurance policies. Enterprises within this industry include fraternal organizations, privately held insurers, publicly traded insurers and mutual insurance companies.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.

Table of Contents

  • Industry Definition
  • Main Activities
  • Similar Industries
  • Additional Resources
  • Executive Summary
  • Key External Drivers
  • Current Performance
  • Industry Outlook
  • Industry Life Cycle
  • Supply Chain
  • Products & Services
  • Demand Determinants
  • Major Markets
  • International Trade
  • Business Locations
  • Market Share Concentration
  • Key Success Factors
  • Cost Structure Benchmarks
  • Basis of Competition
  • Barriers to Entry
  • Industry Globalization
  • Capital Intensity
  • Technology & Systems
  • Revenue Volatility
  • Regulation & Policy
  • Industry Assistance
  • Industry Data
  • Annual Change
  • Key Ratios

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Massachusetts Mutual Life Insurance Co
  • Northwestern Mutual Life Insurance Co
  • Guardian Life Insurance Co Of America
  • Metlife Inc.
  • Manulife Financial Corp