Life & annuity insurance occupies the lion’s share in global premiums.

This segment of insurance is directly and severely affected by macroeconomic changes, especially changes in the associated regulatory environment and the health of associated capital markets.

• Strong Recovery Gives Way to Stable Returns in Developed Markets: Over 2014-2015, the life insurance market (excluding health) surged ahead of the global P&C sector, by a small percentage. Growth rates have remained varied across geographies in developed markets, culminating in a higher than the P&C growth rate, over 2014-2015. Premium growth rates are currently lower in Western European countries, and in a way, “normal” than during 2012-2013, when strong growth rates were observed due to regulatory incentives. Alternative capital assets, occasionally, and non-inclusion in 401(k) plans hinder the growth of life insurance in mature markets, complete with other regional contexts that cannot be discounted when formulating a business plan.
• Life Insurance Premiums Lead Premium Growth in Emerging Markets, Insurance Penetration to Provide Insight on the Markets to Select for Prospective Business: Underserved markets in Asia and Latin America lead the charge in boosting the global growth of this insurance business class. The Asian markets are led by life insurances (with the exception of Sri Lanka and Laos). While particular segments in P&C insurance have outstripped the premium growth of life insurance in Asia, in 2015, life insurance growth outdid the P&C growth.
• Stagnating Life Insurance Penetration Leads, and Decreasing Proportion in PFA Leads to the Popularity of Alternative Products: The life Insurance share of PFA (personal financial assets) differs widely due to country-level regulations and demand from customers. Directly associated with insurance penetration, which is seen to stagnate in mature markets, we estimate that despite growth in life insurance globally, this scheme’s proportion in PFA is set to decline further still in the future. In place of life insurance products, more innovative products which which maximize the client’s need for downside coverage, while also maximizing the product’s upside potential will be favoured. These products include variable life and annuities. Whether cyclically or structurally, variable life insurance products have found market demand not only in mature markets, where they did better than the traditional life insurance segment (even during times of financial crises), but also in emerging economies.
• Insurance Industry’s Trends: Technological disruptions across insurance sub-verticals, changing risk dynamics, and atypical capital access opportunities affect the sub-verticals of the P&C insurance industry in different measures, making some opportunities better than the others.