U.S. life and health insurance industry direct premiums expect decline for the first time in four years

NEW YORK, July 25, 2017

Tim Zawacki, senior insurance research analyst of S&P Global Market Intelligence said, "Though key demographic trends bode well for the continued expansion of products such as life insurance and annuities over the longer term, a lack of clarity from Washington, D.C. on certain regulatory matters is putting significant pressure on sales of certain types of products in the near term."

Direct premiums and considerations across the life, annuity and accident and health business lines were approximately $654.6 billion in 2017, down 1.2% from 2016's record result of $662.6 billion. In subsequent years, S&P Global Market Intelligence projects low- to mid-single digit percentage growth in direct premiums and considerations in reflection of an expected rebound in annuity sales.  Moreover, as a result of slumping sales stemming from a lack of clarity regarding the Trump administration's plans for the Labor Department's fiduciary rule, the report projected a decline in ordinary individual annuity considerations of 11.5%.

Additional findings in the 2017 U.S. Life and Health Insurance Market Report include:

• Low-single-digit growth in direct life insurance premiums, including 2.2% in 2017.
• First-year and single-premium direct premiums and considerations are projected to fall by 6.3% - faster than overall direct premiums and considerations – reflecting S&P Global Market Intelligence's view of the effect of lower sales of indexed and variable annuities.
• The aging of the American population and the challenges associated with saving for retirement will continue to drive demand for many of the industry's products.
• The supply of solutions the industry offers will continue to be constrained by profitability concerns in a low interest rate environment as demonstrated by plunging sales of individual long-term care policies.

For an executive summary of the report with additional analysis and charts, please click here. To learn more about S&P Global Market Intelligence in-depth sector coverage of the insurance industry, please click here.

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