If you want to nab an outsize share of life insurance and annuity sales, it’s best to be big. That much is evident in a new report from Conning.
The investment management firm’s 7th annual study, “Individual Life-Annuity Growth and Profit Leaders: Leading for the Long-Term,” shows the industry’s titans garner the lion’s share of premiums paid on new and existing policies, an amount that now tops $265 billion.
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Conning’s report, part of the company’s Strategic Study Series, analyzes carrier performance based on such factors as operating margin, return on average surplus, premium growth, and above average sales (as measured by annualized premium). In 2016, Conning extended the measurement period to 9 years from 5 years in prior editions.
Mergers and acquisitions among carriers during the past decade boosted the market share of the 25 largest companies to 72 percent in 2015 from 65 percent in 2006, the report notes. The market concentration among the industry’s behemoths is even greater in individual product lines.
That’s because of insurers’ heightened focus on particular product lines. Over the 9-year period studied, the 25 largest individual annuities carriers increased their share of the annuity pie to 82 percent from 73 percent.
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As measured in direct life and annuity premiums, market share by carrier size, according to A.M. Best data cited by Conning, breaks down as follows:
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59.4 percent: non-leading large insurers
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24.1 percent: leading large insurers
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11.7 percent: non-leading mid-size insurers
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3.1 percent: non-leading small insurers
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1.2 percent: leading mid-size insurers
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0.5 percent: leading small insurer.
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Related: Individual life insurance premium up slightly for first half of 2016
Despite industry consolidation, small and mid-size carriers remain firmly entrenched in the market, and some have strengthened their position. (Thinkstock)
Minnows thriving among the big fish
Despite industry consolidation, small and mid-size carriers remain firmly entrenched in the market, and some have strengthened their position.
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