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Group segment strength bolsters US life insurance premium growth in Q2

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Group segment strength bolsters US life insurance premium growth in Q2

U.S. life insurance premiums increased by nearly 5% year over year in the second quarter on the back of particularly strong growth in the group life segment.

Group life premiums across the industry surged to $10.36 billion, up 12.2% versus the prior year. Three insurers Nationwide Mutual, MetLife Inc., and Massachusetts Mutual Life Insurance Co. recorded group life premium increases of at least a quarter of a billion dollars at $329.9 million, $295.7 million and $261.3 million, respectively.

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Individual premiums, reported as ordinary premiums within the regulatory filings, still account for the bulk of total life premiums. Growth in the individual life space was more modest, with premiums ticking up 3.0% year over year to $36.36 billion in the second quarter.

Northwestern Mutual Life Insurance Co. and New York Life Insurance Co., the two largest writers of individual life insurance, experienced double-digit year-over-year growth. Northwestern Mutual's individual life premiums were $4.05 billion in the period, up from $3.60 billion in the second quarter of 2018. New York Life's individual life premiums grew by 12.2% to $3.09 billion.

Prudential Financial Inc.'s individual life premiums grew by 9.2% year over year; the company reported new individual life sales of $181 million, or 27% higher than a year earlier. The growth reflected higher sales in variable and universal life product lines.

Lincoln National Corp., the third-largest writer of individual life insurance and the sixth-largest writer of all life policies, saw its ordinary premiums increase to $1.96 billion in the most recent quarter from $1.80 billion a year ago. Lincoln experienced double-digit growth in new sales in its universal, index-universal, variable and term product lines, while its life combination product, MoneyGuard, saw a decline of 1.8%.

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 not only reflects 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.