Life Insurance, Annuities: Industry’s Largest Investment Capital Sources
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According to the Federal Reserve, the Life Insurance and Annuities industry is one of the largest sources of investment capital in
The decline in revenue is largely attributed to investment losses, but a drop in income from premiums also hurt the industry. As unemployment rose and disposable income diminished, demand for individual policy coverage weakened. Similarly, the rise in unemployment diminished sales of group coverage. Investment income continued to fall due to the industry's exposure to real estate investments, mortgages and other debt-related securities. As a result, revenue fell about 12.4% in 2010. In 2011, however, the declines started to reverse, and revenue in 2012 is expected to increase 1.4%. Further, the number of employees is starting to creep upward. Revenue is projected to increase in 2013 as the industry benefits from higher interest rate returns on bonds and other debt-market securities. Beyond this one-year gain, industry growth will remain restrained over the majority of the next five years, hampered by persistent unemployment. Investment income is also expected to be modest compared with pre-2008 levels as firms attempt to lower financial risks and improve stability.
The US Life Insurance and Annuities industry has low market concentration, as the top four life insurers in
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IBISWorld industry Report Key Topics
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.
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