Retirement accounts and mutual fund companies ripped about $3 trillion in assets away from U.S. life insurers between 1995 and 2019, according to analysts at Ernst & Young.
The EY analysts found that life insurers’ share of U.S. household assets fell to 4% in 2019, from 10% in 1995.
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Mutual fund companies have increased their share of U.S. household assets to 24% of the total, from 13%, and retirement accounts have increased their share to 37%, from 28%.
The share of household assets held in stocks and bonds outside of mutual funds or retirement accounts fell to 18%, from 23%.
The EY analysts report that, around the world, more than half of consumers are unaware of the idea that they can use life insurance to save money, and annuities to protect themselves against the risk of outliving their income.
In part because of that lack of awareness, consumers around the world have about $120 trillion less life insurance than they need, and about $140 trillion less retirement savings than they should have, the analysts estimate.
“Rising generations of consumers need to be educated about the value of insurance during different phases of their lives,” the analysts write.
— Read Q3 Life, Health and Annuity Earnings Season Calendar, on ThinkAdvisor.