Despite Challenges, 'Moderate Growth' Ahead For Life/Health Industry - InsuranceNewsNet

Get the magazine read by the nation’s top 1% of producers delivered to your door monthly. Subscribe Now

InsuranceNewsNet

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Top Stories
Topics
  • Life Insurance
  • Annuity News
  • Health/Employee Benefits
  • Property & Casualty
  • Advisor News
  • Washington Wire
  • Sponsored Content
  • INN Exclusives
  • Newswires
  • INNsider
  • INN Exclusives
  • NewsWires
  • Magazine
Sign in or register to be an INNsider.
  • INN Exclusives
  • NewsWires
  • ★ Regulation News
  • Magazine
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Susbcribe

Get Social

  • Facebook
  • Twitter
  • LinkedIn
  • Google+
Insider
Top Stories
Top Stories RSS Get our newsletter
Order Prints Share
November 22, 2019 Top Stories No comments Views: 933

Despite Challenges, ‘Moderate Growth’ Ahead For Life/Health Industry

By John Hilton
Life and health insurance revenues were healthy in 2018, Tiburon Strategic Advisors reports.

Insurers can expect "moderate growth" in the coming years on both the property & casualty and life/health sectors, a leading analyst says, but far greater opportunities exist for certain products.

Specifically, long-term care insurance and longevity annuities, said Chip Roame, managing partner of Tiburon Strategic Advisors.

Both products are desperately needed by baby boomers and near boomers, he said, but might not be evolved enough to be sold as heavily as they should be. LTC coverage is making a comeback, Roame noted, but it remains to be seen how much it sells.

"Some (insurers) are coming back in, many with bundled products, with long-term care linked to a life insurance policy," he said during a recent webinar. "It should be huge growth. As baby boomers are aging, many people need this product, but it might not be available at the right price."

The Tiburon webinar focused on the performance and future of insurance products, which generate about $1.5 trillion of revenues. About $1.2 trillion of that is premium, while the other $300 billion is interest, dividends and other investment income for those firms.

From that, insurers net $88 billion in profits, Roame said. Life and health insurance represents about 60% of the revenues, while P&C products are responsible for about 70% of the profit.

More Predictions

Roame commented on three additional Tiburon predictions for the future of insurance products:

  • Potential for federal regulation. With the present Republican administration, federal encroachment into insurance regulation doesn't seem likely any time soon, Roame conceded.

"But periodically we hear that fed regulation is bubbling back up and insurance may be regulated at the federal level," he added. "So we’ll see, but that’s always out there."

  • Evolving capital structures.

“You’re now starting to see some rapid insurance company consolidation," Roame said. "Unlike banks, brokerage companies and some others, insurance companies generally buy each other. They buy investment managers and then they buy and often sell broker-dealers."

  • Opportunities outside the United States.

“With growing populations and younger populations in Asia and Africa, I think there’s a lot of upside for insurance companies to think outside the U.S. box," Roame said.

Some Good, Some Bad, Mostly Steady

Overall 2018 insurance profits of $88 billion returned the industry to near 2015 profitability levels. After posting a $92.6 billion profit in 2015, insurance profits dropped to about $76 billion in 2016 and 2017.

MetLife remains the king of the insurance world, Roame said, posting $87 billion in 2018 revenues, topping State Farm ($66 billion), Prudential Financial ($48 billion) and Berkshire Hathaway ($44 billion).

As a share of overall revenue, the property & casualty sector revenues have been slowly and steadily increasing. P&C products comprised 37% of revenues in 2014, with life/health at 63%.

In 2018, P&C products made up 41% of revenues, with life/health declining to 59%. P&C products had a big 2018, accounting for 67% of net profits in the insurance product world, up from a 51% share one year earlier.

“We’re expecting moderate growth in this space," Roame said of P&C products. "A couple things that are booming – one is cyberinsurance, that’s a big opportunity. And another is online distribution, or what is known in the venture capital world as insurtech. There's a lot going on in the online delivery of insurance."

A tougher story on the life and health side, where net profits slid to $28 billion, down about 25% from 2017. Health insurance premiums came in at $137 billion, up from $115 billion year over year.

Life insurance revenues were $905 billion, up from $840 billion in 2017. At $2 trillion, annuity sales are not even close to mutual fund revenues ($17 trillion), Roame explained, adding that "$2 trillion is nothing to sneeze at."

The life/health industry continues to face regulatory pressure and change is likely to come, Roame concluded.

“We expect moderate grow for the life and health insurance industry," he said. “I think it’s quite obvious that we‘re going to see some restructuring of health insurance."

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

© Entire contents copyright 2018 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

 

Older

Single-Premium Pension Buy-Out Sales Top 3Q Sales Record

Newer

Variable Annuities Show Slight Gains In 3Q, Wink Reports

Advisor News

  • RIAs Getting Bigger Slice Of $7 Trillion Pie
  • Charitable Giving Has No Seat At America’s Holiday Table
  • Smaller Stocks Gain On Bigger Players As 2019 Closes
  • Securities America Says Goldstein & Associates Has Joined Its Hybrid RIA Platform
  • PA Dumps Dozens Of Hedge Funds In Cost-Cutting Move
More Advisor News

Annuity News

  • Annuity Sales Down 8.4% In 3Q; Up 7.5% Year-To-Date: Report
  • Wink Unveils Beefed Up AnnuitySpecs Tool
  • Plaintiffs Abandon Lawsuit Targeting Security Benefit Proprietary Index
  • NAIC Regulators Move Annuity Sales Model Forward
  • Robert Kerzner Joins PHP Agency’s Board Of Directors
More Annuity News

Health/Employee Benefits

  • Ex-NFL Players Charged With Trying To Defraud League Health Care Plan
  • Corporate Pensions Head For Extinction As Nature Of Retirement Plans Changes
  • Trump Says He’ll Expand Child Care, Paid Leave For Workers
  • Legal & General Retirement America Surpasses $1B In Premiums For 2019
  • HealthyWomen/WebMD Study: Women Don’t Discuss Health Concerns
More Health/Employee Benefits

Life Insurance

  • New York Life Is Going To The Super Bowl
  • Ladder To Launch In New York Via Relationship With Allianz Life
  • Sproutt Launches; Uses Data To Reward Healthy Life Insurance Customers
  • Caregiver Took Out Life Insurance On Florida Man, Then Killed Him, Police Allege
  • Nationwide Named Official Insurance Partner Of Minor League Baseball
More Life Insurance

Featured Offers

Text Ads

Press ReleasesAll press releases

  • Symetra Awarded ISO 27001 Certification for Cybersecurity
  • Equisoft Partners with Refinitiv to Deliver a Powerful Solution for Wealth Managers
  • Life Health Insurance, Investment and Retirement Planning Powerhouse AmeriLife® Expands its Platform of Advanced Life Insurance Services with Acquisition of Agent Support Group
  • Brookstone Capital Management Expands Darryl Ronconi’s Role, Naming Him President and Chief Operating Officer
  • WoodmenLife Launches Unified Selling Experience for Agents with iPipeline
Add your Press Release >

Topics

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty News
  • Advisor News
  • Washington Wire
  • Regulation

Top Sections

  • INN Exclusives
  • INN Insider

Our Company

  • About
  • Editorial Staff
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter Google+
© 2019 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • Sitemap
  • AdvisorNews

Sign in with your INNsider Account

Not registered? Become an INNsider.