Lifestyle trends are changing, including insurance trends. Let's see how statistics are proving this. A general assumption might say that 85% of Americans would agree most people need life insurance, yet upon probing, only 70% concurred that they actually needed any.
This sector, which is generally considered separate, includes private health insurance companies as well as government programs. P/C and L/H insurers also do write some health insurance.
US Property-Casualty (PSC) insurers
As a soft market beyond auto and property catastrophe lines continues to prevail, global insurance renewal rates fell for the 17th consecutive period in the second quarter of 2017. This can be mainly attributed to an overabundance of capital, particularly in the US market, with industry surplus as at June 30th at an all-time high of $704 billion.
MIB Life Index
The MIB Life Index tends to give a strong indication of individually underwritten life insurance activity. Nonetheless, this index fell by 3.2% in the first half of 2017, while activity in the critical 45-59 target age group was down by 5.5%.
Insured Retirement Institute
According to the Insured Retirement Institute (IRI), revenue from annuity sales was down 18% in the first quarter of 2017.
Gap in life insurance coverage in the US
UU IT averages about $200, 000 per household, totaling to $12 trillion.
The collective US retirement savings gap among working households age 25-64 ranges from $6.8 to $14 trillion depending on the financial measure.
Soaring loss costs
Due to higher catastrophe and auto claims, the net income fell by 29% in the first half. This was before huge disaster claims in the third quarter due to hurricanes Harvey, Irma and Maria.
These storms resonated globally, particularly within the reinsurance sector, as did claims from other massive natural disasters outside the US, most notably September's earthquake in Mexico.
Life Insurance and Annuity (L&A)
From L&A side of the business, most carriers seemed to enter 2017 expecting small but steadily rising US interest rates to put their portfolios on a more solid foundation. Nonetheless, those expectations quickly abated given the economic headwinds, keeping the Federal Reserve from taking more aggressive action, thus leaving rates at historically low levels and undermining industry profitability.
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