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Aggregate US life insurance premiums rise 3.4% YOY in Q3

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Aggregate US life insurance premiums rise 3.4% YOY in Q3

U.S. life insurers saw aggregate third-quarter life insurance premiums grow by 3.4% year over year.

The industry's total premiums in the third quarter were $42.35 billion, according to an analysis by S&P Global Market Intelligence. The bulk of the total premiums written are from the individual line of business, which accounted for about 78%, or $33.08 billion in premiums written.

MassMutual's group results have been excluded from the analysis as Massachusetts Mutual Life Insurance Co. filed an amended regulatory statement stating that it reclassified certain corporate-owned life and bank-owned life insurance policies from the group line of business to individual in 2019. It said the policies "did not meet the group classification qualifications."

In aggregate, MassMutual's combined third-quarter premiums increased to $2.20 billion, up 10.8% versus 2018.

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The largest underwriters of life insurance in the U.S. all recorded year-over-year rises in premiums in the quarter. For the largest writer, Northwestern Mutual Life Insurance Co., life premiums were $3.58 billion in the period, up from $3.52 billion in the third quarter of 2018.

Prudential Financial Inc. saw growth in both lines of business, as its group premiums increased to $1.06 billion and individual grew to $1.88 billion in the three months to Sept. 30, up 2.6% and 2.2% compared to the same period in 2018, respectively.

Individual life insurance refers to term insurance and all forms of permanent insurance (e.g., universal, variable, index universal, whole) and is reported as ordinary within NAIC statutory statements. Often offered through the workplace, group life insurance is typically term insurance and allows members of a group to purchase coverage up to a certain level without the need for underwriting.

S&P Global Market Intelligence uses statutory total life premiums to determine market share. Total premium is a preferred indicator of market share as it reflects not only new business but also the persistency of a company's existing business in the form of renewal premiums. Additionally, many policyholder acquisition costs are not recovered within one year. As such, total premium can also be a better indicator of profitability for life insurers, whereas new sales do not necessarily equate with profitability.