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Financial security is one of the basic needs of humans to sustain. Life insurance market in this context is very important as it provides a safety net in terms of financial security to the policyholder against any loss of life. Today life insurance market has grown in each and every market of the world economy.
Globally insurance premium crossed the benchmark of all times and attained USD 5 trillion in 2018. US is world’s largest insurance market but it is forecasted that the share of insurance premiums from China will reach 20% by 2029 and China can surpass US in terms of insurance market size after a decade.
Asian pacific and European regions will be fastest growing in terms of the term Life Insurance Market. It is expected that the growth in this sector will be at a compound annual growth rate of approximately 15% by the year 2023.
For advanced markets real premium growth rate for life insurance is lower than the emerging markets. Also, this rate will shrink to -8% for the advanced market and 0% for an emerging market this year of 2020. Globally a negative growth rate of 6% will be seen this year.
Emerging markets including China will strengthen their places in the global life insurance market in the coming years. Thus Asia will be the fastest-growing continent in the life and non-life insurance market.
It is certain that the COVID-19 crisis will lead to a downturn in the economy and the global insurance market will face premium losses. But still, the magnitude of these losses is totally uncertain till now. In this pandemic situation, the interest rates are lower than usual and thus the savings products will be hit hard, but there will be stability in mortality covers. On the other hand, the non-life insurance market will see profit due to increased risk for COVID-19.
The Life Insurance Market sector plays a vital role in the GDP of a country. Life insurance consumption is still low in some developing countries. Financial literacy, creating awareness still acts as a major challenge for the life insurance companies.
World’s largest insurance company by net premium written is UnitedHealth Group, USA, followed by AXA S.A. France, and Ping An Ins, China as in 2018. The change of net premium written from the previous year is 12.39% for UnitedHealth Group which is greater than the same of AXA i.e. only 3.22% also Berkshire Hathaway Inc. showed a negative change of 4.86%.
The China-based company Ping an Insurance showed a very high change of net premium written of 19.15% from the previous year followed by Japan’s National Mut Insurance Fed Agricultural Coop., Nippon Life insurance company which showed 16.07% and 11.98% change respectively. So, there are chances that these companies will rule the global insurance market in the near future.
In emerging countries like China and India, the disposable income of middle-income group people has been increasing . Thus, a rise in demand for life insurance is visible and growing over the years. People in these emerging economies have now a certain amount of money to invest in insurance. Seven emerging markets will contribute to the global growth of 42% where China will contribute 27%.
Life insurance premiums may decline globally through the end of 2020 and by in advanced economies the decline is expected to be larger. U.S. insurance industry net premiums written totaled $1.32 trillion in 2019, with premiums recorded by property/casualty (P/C) insurers accounting for 48 percent, and premiums by life/annuity insurers accounting for 52 percent
Principle-based reserving (PBR) has become mandatory for all US life insurers as of 1 January 2020, a significant departure from previous rule-based reserving. PBR requires insurers to combine company-specific assumptions with rule-based calculations. Life insurers are also required to use new mortality tables for business written in 2020.
The Federal Reserve of the United States has stated that interest rates will likely remain near zero until at least 2023. This could be problematic, particularly for insurers with higher exposure to lower-rated, less-liquid investment-grade securities.
More companies have adopted accelerated underwriting policies and hybrid life insurance policies in US. Allianz boosted its limit on accelerated underwriting policies from $1.5 million to $3 million and will maintain that limit going forward.
Low interest rates, market volatility and accelerated unemployment have imposed substantial downward pressure on the profitability and return on assets of life insurers in 2020. Although the sector in US is well capitalized, large-scale downgrades and defaults could strain the capital position of insurers that have expanded exposure to less-rated, less-liquid investment grade securities over the last several years.
As of 2019, the penetration for life insurance in India is 2.82%. Gross premium collected by life insurance companies in India increased from US$ 39.7 billion in FY12 to US$ 94.7 billion in FY20. During FY12-FY20, premium from new business of life insurance companies in India increased at a CAGR of 15% to reach US$ 37 billion in FY20. In life insurance segment, private players had a market share of 31.3% in new business in FY20.
Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. LIC had the largest market share of 67.38 per cent as of January 31, 2021.The rest of 23 players had the remaining 32.62 per cent share. In November 2020, Life Insurance Corporation of India launched its first software application, ANANDA, an acronym for ‘Atmanirbhar Agents New Business Digital App’ or the on-boarding process with the aid of the agent/broker to get life insurance policy through paperless module.
LIC registered a fall of 2.43 per cent in new business premium during January 2021 against a year ago. The remaining 23 private sector players in the life insurance sector such as SBI Life, ICICI Prudential Life, HDFC Life, collected first-year premium, which is up by around 15.30 per cent from a year ago in 2020.
The Indian insurance sector still lags in life insurance to all segments of society. To compete with the western and European countries it’s a big-time to realize and shift focus towards increasing the domestic insurance penetration level and digitalization of the sector. Life insurance industry in the country is expected to increase by 14-15% annually for the next three to five years.
Genstar Capital, a renowned private equity firm concentrating on investments in selected segments of the financial services, healthcare, industrials, and software industries, has invested in AmeriLife Group.
The joint venture between two of the world’s most prestigious private equity firms is a testament to AmeriLife’s strength and rapid progress, and it lays the groundwork for ongoing national expansion.
AmeriLife is a leading independent marketing firm in the United States, as well as a registered financial advisor. More than 1,800 associates work for the organisation around the country, supporting a growing community of more than 300,000 licenced agents and advisers in over 90 offices who, in turn, help more than 5 million pre-retirees and retirees improve their health and financial well-being.
To fuel the tremendous organic growth, AmeriLife has rapidly grown its affiliate base and invested heavily in best-in-class shared resources and support. Genstar’s investment will accelerate their growth and help us continue to build out a platform to provide superior support to carrier partners, affiliates, and agents.
AmeriLife has demonstrated that their business model is the way of the future in terms of insurance marketing and distribution. They see great opportunity for AmeriLife and its partners when they combine Genstar’s strong knowledge in financial services, software, and healthcare, as well as their collective dedication to provide the data, tools, and technology required to compete and win in today’s economy.
AmeriLife has established itself as one of the leading distributors of health and financial solutions in the United States, and they look forward to continuing their cooperation with Genstar, whose investment will assist AmeriLife reach its next level of growth and development..
Impact Partnership and Policygenius announced a partnership to deliver Impact’s network of financial adviser and broker-dealer partners the term life fulfillment platform Policygenius Pro.
A readymade partnerships platform called Policygenius Pro, which was previously disclosed, aids advisers in accelerating and streamlining life insurance sales. By using this tool, advisers and agents can direct their clients to Policygenius, which will guide them through every step of the process, from making a final decision on a policy to putting coverage into effect.
The first life and health insurance provider in New Zealand to go live on the FINEOS Platform is Partners Life, according to the market-leading provider of group and individual core systems for life, accident, and health insurance, FINEOS Corporation. The FINEOS Platform is an end-to-end SaaS core platform that was created with life, accident, and health insurers in mind.
The relationship between Partners Life and FINEOS allowed the insurer to replace its old system with FINEOS Claims, which provided Partners Life with unmatched operational and customer service advantages.
Black Americans will now have easier access to term life insurance thanks to a new relationship between Kinly and Haven Life, the customer-focused life insurance agency backed and owned entirely by Massachusetts Mutual Life Insurance Company (MassMutual). Through this collaboration, members of Kinly will have access to the Haven Term and Haven Simple term life insurance products via the Kinly mobile app.
AXA:
It is one of the leading insurance companies in world, headquartered in France. There major businesses are in property and casualty insurance, life insurance, savings, and asset management.
Revenue from life insurance in 1Q2020 was 4% up, but 2Q2020 was severely hit by COVID19 and revenue was down by -21%. In full Year 2020 Earnings gross revenue fall by 6%, EUR 38.3 bn to EUR 31.5 bn. Protection revenues were up 2% to Euro 15.2 billion, mainly driven by France (+3%) following growth in both international and domestic markets, notably in the fourth quarter, and Asia (+3%) from higher sales in Japan of Protection with Unit-Linked products.
French insurance group AXA SA has agreed to sell its Greece-based life and savings, and property and casualty businesses to Italy’s Assicurazioni Generali SpA for €165 million in cash, Axa aims to use the sale proceeds to bolster its property/casualty operations.
They successfully transformed the group, shifting AXA’s profile towards insurance technical risks, simplifying the organization and scaling innovation in services.
Allianz:
It is one of the leading insurance company. Allianz Life Named One of the World’s Most Ethical Companies in 2021.
Operating profit from life-health insurance was impacted by capital market turbulence in Q32020. Impact from COVID 19 expected at EURO -0.4bn. Total revenue from life-health insurance was 16.8 Euro bn (-8.2%).
Total revenues decreased by 1.3 percent to 140 billion euros in 2020. The present value of new business premiums, in Life/Health insurance decreased to 61.5 (67.0) billion euros in 2020 impacted by COVID-19 restrictions. The largest volume decreases were seen in Germany and in the United States.
They witnessed a recovery in sales and margin resilience in the Life/Health business segment at the end of 2020. Operating profit decreased to 4.4 (4.7) billion euros in 2020. This was mainly due to the disposal of Allianz Popular in Spain as well as loss recognition and a positive prior-year impact in the United States.
LIC
Life Insurance Corporation (LIC) is the sole public sector company in India. It had the largest market share of 67.38 per cent as of January 31, 2021.
The Life Insurance Corporation (LIC) is on track to have its best year in terms of stock market earnings, as the IPO-bound insurer has already booked a net profit of Rs 33,085 crore on the selling of equities this year, compared to a profit of Rs 18,371.47 crore in the previous fiscal. Profits booked by LIC this year are the highest ever in the history of the insurer. With the upward momentum in markets continuing, LIC’s profits for the full financial year are expected to double over the previous year according to company officials.
In November 2020 it launched “ANANDA” – ATMA NIRBHAR AGENTS, new business digital application. The Digital application is a tool for the on boarding process to get the Life Insurance policy through a Paperless module with the help of the Agent / Intermediary.
Ping an
Headquarters in Schenzen, Ping an is world’s largest insurance company. It operates through the following segments: Insurance, Banking, Trust, Securities, Other Asset Management, Technology, and Others.
The operating profit attributable to shareholders of the parent company in the first half of 2020 increased by 1.2% year on year to RMB74,310 million. Total revenue contribution from the technology business in the first half of 2020 increased by 11.2% year on year to RMB42,732 million. Ping An places great importance on strong shareholder returns and declared an interim dividend of RMB0.80 per share in cash, up 6.7% year on year.
Affected by the COVID-19 epidemic, Ping An experienced difficulties in offline business development and rising risks in retail consumer finance in 2020.
The new business value of the insurer’s life and health business dropped 35% to 49.6 billion yuan for the full year, compared with 76.0 billion yuan the year before.
