NU Online News Service, Jan. 20, 2004, 5:02 p.m. EST – Terrorism has given a short-term boost to profits in the U.S. group life insurance market.[@@]
Group life accounted for only 2% of U.S. life and health insurance industry premium revenue in 2002 but 6% of the industry’s profits, according to an industry review from Moody’s Investors Service, New York.
Total U.S. group life earnings increased to $1.3 billion in 2002, up from $860 million in 2001.
The group life market “was one of the industry’s bright spots in an otherwise challenging year,” Moody’s analysts write in the review.
But the analysts note that group life profits have returned to 1999 levels partly because of lower expenses for reinsurance. Group life reinsurance costs are lower “because of the lack of new catastrophic coverage to spend on,” the analysts report.