Life Insurance FACTS AND STATISTICS

Life Insurance

	LIFE/HEALTH INSURANCE The primary business of life/health insurance companies is no longer traditional life insurance, but the underwriting of annuities — contracts that guarantee a fixed or variable payment over a given period of time. Nevertheless, the sale of such life insurance products as whole life and term life policies remains an important part of the business. Life insurance is essentially an investment of savings that offers a tax-free sum to the beneficiary at some point in the future. Life insurers invest the premiums they collect primarily in government and corporate bonds, but also in mortgage loans (mostly commercial). Besides annuities and life insurance, life insurers may offer other types of financial services such as asset management.
	INVESTMENTS, LIFE/HEALTH INSURERS, 2001-2005 Amount ($ millions) Percent of total investments Investment type 2001 2004 2005 2001 2004 2005 Bonds $1,520,471.5 $2,049,337.8 $2,145,896.5 72.10% 75.94% 76.71% Stocks 90,806.7 97,891.5 94,573.0 4.31 3.63 3.38 Preferred Stocks 21,881.8 32,187.3 25,652.5 1.04 1.19 0.92 Common Stocks 68,924.9 65,704.2 68,920.5 3.27 2.43 2.46 Mortgage loans on real estate 236,873.7 266,049.1 276,446.8 11.23 9.86 9.88 First liens 236,186.5 264,913.7 275,122.2 11.20 9.82 9.83 Other than first liens 687.2 1,135.4 1,324.6 0.03 0.04 0.05 Real estate 22,230.6 19,533.9 19,072.4 1.05 0.72 0.68 Properties occupied by company 6,272.4 5,825.7 5,375.0 0.30 0.22 0.19 Properties held for income production 13,646.1 12,306.0 12,789.0 0.65 0.46 0.46 Properties held for sale 2,312.1 1,402.2 908.3 0.11 0.05 0.03 Cash, cash eqivalent and short-term investments 70,917.6 74,656.0 61,947.5 3.36 2.77 2.21 Contract loans 103,153.0 105,565.8 106,440.7 4.89 3.91 3.80 Other invested assets 50,897.4 69,716.5 77,711.4 2.41 2.58 2.78 Receivables for securities 3,709.3 2,500.1 3,005.5 0.18 0.09 0.11 Aggregate write-ins for invested assets 9,582.1 13,402.6 12,488.8 0.45 0.50 0.45 Total 2,108,696.4 2,698,653.2 2,797,582.5 100.00 100.00 100.00 Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.
	LIFE/HEALTH INSURANCE INDUSTRY: SELECTED OPERATING DATA, 2003-2005 ($ millions) 2003 2004 2005 Premiums and annuity considerations (1) $500,234.2 $531,160.4 $518,526.9 Net investment income 142,912.9 145,544.9 148,985.9 Net gain from operations (2) 39,113.2 41,146.1 40,171.4 Federal and foreign income taxes (3) 7,890.5 10,002.6 9,016.2 Net realized capital gains/losses -4,668.3 1,039.8 3,184.6 Net income 26,554.4 32,183.3 34,339.8 Dividends to stockholders -10,958.9 -12,995.8 -21,692.3 Capital and surplus (end of year) 223,771.1 237,014.2 239,742.7 (1) Life and accident and health policies and contracts. (2) After dividends to policyholders and before federal income taxes. (3) Incurred (excluding tax on capital gain). Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.
	LIFE/HEALTH INSURER FINANCIAL ASSET DISTRIBUTION, 2001-2005 ($ billions) 2001 2002 2003 2004 2005 Total financial assets $3,224.6 $3,335.0 $3,772.8 $4,130.3 $4,380.7 Checkable deposits and currency 36.8 35.3 47.3 53.3 53.8 Money market fund shares 173.3 159.8 151.4 120.7 118.6 Credit market instruments 2,074.8 2,307.8 2,488.3 2,661.4 2,773.7 Open market paper 59.3 74.0 55.9 48.2 37.7 U.S. government securities 307.2 409.4 420.7 435.6 455.9 Treasury 53.7 78.5 71.8 78.5 81.1 Agency- and GSE (1) -backed securities 253.5 330.9 348.9 357.1 374.8 Municipal securities 18.7 19.9 26.1 30.1 31.7 Corporate and foreign bonds 1,342.4 1,449.3 1,620.2 1,768.0 1,859.8 Policy loans 104.1 105.1 104.5 106.1 105.8 Mortgages 243.0 250.0 260.9 273.3 282.7 Corporate equities 811.3 708.9 919.3 1,053.9 1,154.1 Mutual fund shares 88.3 76.6 91.7 114.4 131.2 Miscellaneous assets 40.1 46.8 74.7 126.6 149.4 (1) GSE=government-sponsored enterprise. Source: Board of Governors of the Federal Reserve System.
	PREMIUMS BY LINE Annuities, contracts that guarantee a fixed or variable payment, now account for 51 percent of the life/health business, followed by life insurance products (26 percent) and accident and health products (22 percent). Traditional life insurance policies continue to be an important part of the life insurance business. These policies can be sold on an individual basis (referred to as "ordinary life") or to groups, such as employees of the same company. Ordinary life insurance can be "term," which provides financial protection for a specific period of time, or "permanent," which provides long-term financial protection and builds up a cash value that the policyholder can use during his or her lifetime. There are several types of permanent policies, including whole life and universal life. Most group policies provide term coverage. A more specialized product, credit life insurance, is designed to repay the balance of a loan in the event a borrower dies before a loan is repaid. Industrial life refers to policies with a low face value with premiums collected by an agent on a weekly basis. The accident and health sector consists of individual and group products that provide coverage for sickness or accidental injuries. Accident and health, i.e. health insurance, is also written by property/casualty insurers and health insurers. Credit accident and health protects a debtor if the borrower becomes disabled and cannot repay debts.
	LIFE/HEALTH INSURANCE INDUSTRY PREMIUM BY LINE, 2001-2005 ($ millions) 2001 2004 2005 Lines of insurance Net premiums written Percent of total Net premiums written Percent of total Net premiums written Percent of total Annuities Ordinary individual annuities $140,805.4 29.4% $167,472.0 31.4% $162,760.5 30.7% Group annuities 109,599.3 22.9 104,537.3 19.6 110,084.3 20.8 Total 250,404.7 52.3 272,009.3 51.0 272,844.8 51.5 Life Ordinary life 95,093.7 19.8 107,489.9 20.1 108,711.2 20.5 Group life 28,248.6 5.9 27,678.3 5.2 29,088.3 5.5 Credit life (group and individual) 1,632.8 0.3 1,150.7 0.2 1,258.0 0.2 Industrial life 337.6 0.1 208.9 (1) 129.4 (1) Total 125,312.7 26.2 136,527.8 25.6 139,186.9 26.3 Accident and health Group 73,665.0 15.4 85,495.9 16.0 79,303.4 15.0 Other 28,201.7 5.9 38,674.1 7.2 37,343.7 7.0 Credit 1,551.7 0.3 1,156.5 0.2 1,135.4 0.2 Total 103,418.4 21.6 125,326.5 23.5 117,782.5 22.2 Total, all lines 479,135.8 100.0 533,863.6 100.0 529,814.2 100.0 (1) Less than 0.1 percent. Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.
	CREDIT LIFE INSURANCE Credit life insurance, a form of decreasing term insurance, protects creditors such as banks. The borrower pays the premium, generally as part of the credit transaction, to cover the outstanding loan in the event he or she dies. The face value of a policy decreases as the loan is paid off until both equal zero. When loans are paid off early, premiums for the remaining term are returned to the policyholder. Credit accident and health, a similar product, provides a monthly income in the event the borrower becomes disabled.
	CREDIT LIFE, AND CREDIT ACCIDENT AND HEALTH INSURANCE DIRECT PREMIUMS WRITTEN, 1996-2005 ($000) Year Credit life Credit accident and health 1996 $1,903,407 $1,702,375 1997 1,969,079 1,897,056 1998 1,998,488 1,798,194 1999 1,971,462 1,724,729 2000 1,849,655 1,675,327 2001 1,632,806 1,551,697 2002 1,251,275 1,331,639 2003 1,046,474 1,119,672 2004 1,150,233 1,156,579 2005 1,257,714 1,135,355 Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.
	DISTRIBUTION CHANNELS Life insurance was once sold primarily by career life agents, captive agents that represent a single insurance company, and by independent agents who represent several insurers. Now life insurance company products are also sold directly to the public by mail, telephone and the Internet. In addition, in the 1980s insurers began to market annuities and term life insurance through banks and financial advisors, professional organizations and workplaces. A large portion of variable annuities, which are based on stock market performance, and a small portion of fixed annuities, are sold by stockbrokers.In 2004 affiliated (i.e. captive) agents accounted for 36 percent of new individual life insurance sales in 2004, according to research by LIMRA.
	LIFE INSURANCE DISTRIBUTION (NEW INDIVIDUAL LIFE PREMIUMS), 2004 (1) (1) Based on LIMRA International estimates. Source: LIMRA International, Product Research.
	WORKSITE LIFE INSURANCE COMPANY SALES BY LINE OF BUSINESS, 2005 (1) (1) Worksite marketing is the selling of voluntary (employee-paid) insurance and financial products at the worksite. The products may be on either an individual or group platform and are usually paid through periodic payroll deductions. (2) Short-term and long-term disability. Source: Eastbridge Consulting Group, Inc.	Worksite sales of life and health insurance in 2005 were $4.4 billion, up from $4.2 billion in 2004.
	TOP TWENTY U.S. LIFE/HEALTH INSURANCE GROUPS AND COMPANIES BY REVENUES, 2005 ($ millions) Rank Group Revenues Assets 1 MetLife $46,983 $481,645 2 Prudential Financial 31,708 417,776 3 New York Life Insurance 28,051 153,952 4 TIAA-CREF 25,917 399,161 5 MassMutual Life Insurance 22,799 138,365 6 Northwestern Mutual 19,221 133,057 7 AFLAC 14,363 56,361 8 UnumProvident 10,437 51,867 9 Guardian Life of America 9,377 36,880 10 Principal Financial 9,010 127,035 11 Assurant 7,498 25,366 12 Thrivent Financial for Lutherans 6,190 54,932 13 Lincoln National 5,488 124,788 14 Pacific Life 4,840 86,977 15 Conseco 4,327 31,557 16 Western & Southern Financial 4,314 29,021 17 Jefferson-Pilot 4,220 36,078 18 Mutual of Omaha Insurance 4,051 16,441 19 Torchmark 3,126 14,769 20 Unitrin 3,048 9,198 Source: Fortune.
	LEADING INSURERS, LIFE INSURANCE SALES THROUGH BANKS, 2005 (1) ($ millions, weighted premiums) Rank Company 2004 2005 1 Nationwide $22.8 $33.1 2 Transamerica 36.6 29.3 3 Hartford 24.8 29.0 4 Liberty Life 13.7 15.1 5 AIG/American General 13.2 15.0 6 MetLife/Travelers 17.8 13.5 7 John Hancock/Manulife 16.8 12.6 8 Allstate Financial 31.7 11.9 9 Lincoln National 6.1 10.6 10 Great West Life 11.9 10.1 (1) Ranked by 2005 weighted premiums, which discount 90 percent of single premium (one-time payment) products to approximate the expected value of premium flows to life insurance companies each year. Source: Kehrer-LIMRA.
	TOP 25 LIFE INSURANCE GROUPS BY INDIVIDUAL TERM LIFE INSURANCE ISSUED, 2005 Term life policies issued in 2005 Rank Group Number of policies issued Total amount of death benefits ($000) Average death benefit amount 1 American International Consolidated 407,005 $151,893,644 $373,198 2 State Farm Consolidated 336,728 66,177,556 196,531 3 Citigroup Consolidated 275,331 76,079,901 276,322 4 Liberty National Consolidated 265,015 7,187,770 27,122 5 Direct General Group Consolidated 251,990 2,529,210 10,037 6 Old Mutual Consolidated 160,441 31,371,886 195,535 7 American Family Corp. Consolidated 152,643 14,997,655 98,253 8 Northwestern Mutual Consolidated 116,105 70,757,571 609,427 9 AEGON USA Incorporated Consolidated 113,996 37,482,389 328,804 10 Zurich Insurance Group Consolidated 103,584 25,324,592 244,484 11 Allstate Insurance Consolidated 97,730 45,565,970 466,243 12 New York Life Consolidated 94,169 46,318,853 491,869 13 Protective Life Insurance Consolidated 85,829 39,961,794 465,598 14 JP Morgan and Chase Group Consolidated 83,360 22,574,000 270,801 15 Prudential of America Consolidated 83,148 53,730,230 646,200 16 Metropolitan Group Consolidated 82,706 48,606,983 587,708 17 UnumProvident Life Consolidated 69,296 5,618,460 81,079 18 Banner Life Insurance Consolidated 66,433 38,500,706 579,542 19 USAA Consolidated 63,086 29,609,953 469,359 20 Axa Insurance Group Consolidated 58,204 34,578,917 594,099 21 Lincoln National Consolidated 49,365 23,503,961 476,126 22 Wellpoint Inc. Group Consolidated 48,311 430,313 8,907 23 Great West Life Assurance Consolidated 42,493 3,991,318 93,929 24 American National FNCL Consolidated 36,394 4,986,083 137,003 25 Mutual of Omaha Consolidated 33,612 8,079,784 240,384 Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.
	TOP 25 LIFE INSURANCE GROUPS BY INDIVIDUAL WHOLE LIFE AND ENDOWMENT INSURANCE ISSUED, 2005 Whole life and endowment policies issued in 2005 Rank Group Number of policies issued Total amount of death benefits ($000) Average death benefit amount 1 Liberty National Consolidated 1,010,514 $18,045,231 $17,857 2 American International Consolidated 564,661 22,670,635 40,149 3 Gerber Life Insurance Company 557,754 4,690,886 8,410 4 ING America Insurance Holding Group Consolidated 298,557 20,458,582 68,525 5 UnumProvident Life Consolidated 289,469 8,062,072 27,851 6 State Farm Consolidated 287,503 17,410,414 60,557 7 AEGON USA Incorporated Consolidated 270,423 26,599,190 98,361 8 Unitrin Group Consolidated 209,952 2,033,148 9,684 9 Metropolitan Group Consolidated 182,992 35,879,181 196,070 10 New York Life Consolidated 176,704 27,118,662 153,469 11 Northwestern Mutual Consolidated 127,570 27,061,790 212,133 12 Mutual of Omaha Consolidated 117,543 3,328,102 28,314 13 Allstate Insurance Consolidated 112,319 14,516,798 129,246 14 Conseco Consolidated 95,970 2,206,071 22,987 15 American Family Corp. Consolidated 84,138 4,107,434 48,818 16 Zurich Insurance Group Consolidated 77,619 5,923,855 76,320 17 American National FNCL Consolidated 74,713 3,096,425 41,444 18 Boston Mutual Insurance Consolidated 70,433 1,349,882 19,165 19 Physicians Mutual Consolidated 70,123 113,682 1,621 20 Memorial Group Consolidated 63,527 223,562 3,519 21 Western Southern Life Consolidated 61,302 2,892,092 47,178 22 Protective Life Insurance Consolidated 61,219 20,211,088 330,144 23 Security Mutual Life Insurance Company of NY 54,814 1,943,503 35,456 24 American Financial Insurance Group Consolidated 46,094 197,390 4,282 25 Prudential of America Consolidated 45,275 9,789,420 216,221 Source: National Association of Insurance Commissioners (NAIC) Annual Statement Database, via Highline Data, LLC. Copyrighted information. No portion of this work may be copied or redistributed without the express written permission of Highline Data, LLC.