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Life Insurance - US - November 2009

This report highlights the business activity in the life insurance market, with special emphasis on year-end results for 2008. The report also examines the views and behaviors of consumers concerning life insurance, and how they view the industry in the current economic context.

Topics explored include the market size of the life insurance industry based on direct written premium, the recent competitive environment, usage of various marketing channels for purchases of life insurance, key market drivers that influence sales, brand qualities, and recent advertising efforts through TV commercials, print ads, direct mail and emails directed to the consumer. Also explored is consumer ownership of different types of life insurance and annuities, and reasons why life insurance is purchased.

This report builds on the analysis presented in Mintel's previously published reports Life Insurance—U.S., October 2006 and Innovations in the Insurance Marketplace—U.S., July 2008.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Consumer survey data
        • Online surveys
          • Greenfield Online
            • Experian Simmons National Consumer Studies
              • Advertising and promotions
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • Industry overview
                        • The life insurance business lost ground in 2008
                          • Advertising emphasizes strength
                            • DWP declined 7.2% from 2007, the peak year for DWP
                              • Leading life insurance companies are AIG and MetLife
                                • Consumers and life insurance
                                • Insights and Opportunities

                                  • Key points
                                    • Baby Boomers will present several challenges to the industry in the years ahead
                                      • Gen X may gravitate less to life insurance products due to current economic conditions
                                        • Gen Y may provide a ray of sunshine to the life insurance industry
                                        • Inspire Insights

                                            • Trend: Trust in Me
                                              • Trend: Living Better, Longer
                                              • Market Size and Forecast

                                                • Key points
                                                  • Life insurance accounts for 25% of all DWP
                                                    • Figure 1: Life/health insurance industry direct written premium, by line, 2008
                                                  • Life insurance DWP is down 7.7% from its 2007 high
                                                    • Figure 2: Total U.S. life insurance direct written premium, at current prices, 2003-08
                                                    • Figure 3: Total U.S. life insurance direct written premium, at 2008 inflation-adjusted prices, 2003-08
                                                  • Annuities grew moderately in 2008, up 6% over 2007
                                                    • Figure 4: Total U.S. annuities direct written premium, at current prices, 2003-08
                                                    • Figure 5: Total U.S. annuities direct written premium, at 2008 inflation-adjusted prices, 2003-08
                                                  • More than $3 trillion in life insurance sold in 2007
                                                    • Figure 6: Total U.S. life insurance purchases, 2006 and 2007
                                                • Competitive Context

                                                  • Key points
                                                    • Lincoln and Hartford accepted bailout money
                                                      • AIG (American International Group)
                                                        • AIG—One year later
                                                          • M&A virtually non-existent during 2008 and 2009
                                                          • Segment Performance

                                                            • Key points
                                                              • Group life seriously declines, individual life and credit life show modest losses
                                                                • Figure 7: U.S. direct written premium of life/health insurers, by segment, 2006-08
                                                                • Figure 8: U.S. direct written premium of life insurance and annuities, at current prices, by segment, 2003-08
                                                                • Figure 9: U.S. direct written premium of life insurance and annuities, at inflation-adjusted prices, by segment, 2003-08
                                                              • In 2007, fewer life policies purchased, but the total face amount of policies climbed
                                                                • Figure 10: Total U.S. life insurance purchases, by segment, 2003-07
                                                            • Marketing Channels

                                                              • Key points
                                                                • Nearly all life insurance is sold through agents
                                                                  • Figure 11: U.S. individual life market share, by channel, based on first year collected premium, 1999-2008
                                                                • About 40% search online for life insurance, but only 3% buy it this way
                                                                  • Figure 12: Online personal insurance sales, 2007
                                                                • The bank/investment firm channels appeal more to Asians and very high earners
                                                                  • Figure 13: How obtained life insurance, by age, August 2009
                                                                  • Figure 14: How obtained life insurance, by income, August 2009
                                                                  • Figure 15: How obtained life insurance, by race/Hispanic origin, August 2009
                                                                  • Figure 16: How obtained life insurance, by employment status, August 2009
                                                                  • Figure 17: Preference for communicating with insurance company, by gender and generation, August 2009
                                                                  • Figure 18: Preference for insurance agent to communicate with respondent, by gender and generation, August 2009
                                                              • Market Drivers

                                                                • Key points
                                                                  • No population growth in the 35-54 age categories
                                                                    • Figure 19: U.S. population growth, by age, 2002-12
                                                                    • Figure 20: U.S. population and projections for life insurance, by age, 2007-12
                                                                    • Figure 21: Total non-farm payroll losses in thousands, by month, September 2007-September 2009
                                                                    • Figure 22: U.S. unemployment rate, by month, September 2007-September 2009
                                                                    • Figure 23: Average hours worked on private (non-farm) payrolls, 2005-September 2009
                                                                • Leading Companies

                                                                  • Key points
                                                                    • Seven of the top 10 life insurers saw declines in DWP in 2008
                                                                      • Figure 24: Top 10 writers of life insurance, by direct premiums written, 2007 and 2008
                                                                    • Annuities
                                                                      • Figure 25: Top 10 writers of annuities, by direct premiums written, 2008
                                                                    • Term life policies
                                                                      • Figure 26: Top 10 life insurance groups, by number of individual term life insurance policies issued, 2007
                                                                    • Whole life policies
                                                                      • Figure 27: Top 10 life insurance groups, by number of individual whole life and endowment insurance policies issued, 2007
                                                                  • Brand Qualities

                                                                    • Key points
                                                                      • Value, reliability and trustworthiness
                                                                        • Figure 28: Most important attributes of insurance companies, by gender and generation, August 2009
                                                                        • Figure 29: Three most important attributes of insurance company, by gender and generation, August 2009
                                                                      • Consumers are not differentiating insurance companies
                                                                        • Figure 30: Attitudes towards life insurance companies, by age, May 2008
                                                                      • Fortune rankings for most admired insurance companies
                                                                        • Figure 31: World’s most admired insurance companies: life and health companies, 2007 and 2008
                                                                    • Innovation and Innovators

                                                                      • Key points
                                                                        • Prudential Financial’s MyTermsm
                                                                          • Prudential Annuities launches www.retirementredzone.com
                                                                            • MetLife introduces new Whole Life policy
                                                                              • AXA Equitable Offers Enhanced Variable Universal Life Insurance Coverage
                                                                              • Advertising and Promotion

                                                                                • Key points
                                                                                  • Overview
                                                                                    • Print advertising
                                                                                      • Figure 32: Prudential print ad, 2008/09
                                                                                      • Figure 33: New York Life print ad, 2008/09
                                                                                      • Figure 34: Lincoln Financial print ad, 2009
                                                                                      • Figure 35: Guardian Life print ad, 2009
                                                                                      • Figure 36: Genworth Life Insurance and AccuQuote print ad, 2009
                                                                                    • Direct mail
                                                                                      • Figure 37: Hartford Life Information Survey, 2009
                                                                                      • Figure 38: Gerber’s “Grow Up Plan” direct mail, 2008/09
                                                                                      • Figure 39: Prudential Insurance direct mail, 2009
                                                                                    • Email advertising
                                                                                      • Figure 40: Prudential Insurance email ad, 2009
                                                                                      • Figure 41: MetLife Insurance email ad, 2009
                                                                                      • Figure 42: AIG Direct: American General Life Insurance Company email ad, July 2009
                                                                                      • Figure 43: AccuQuote and Genworth Insurance email ad, 2009
                                                                                    • TV advertising
                                                                                      • Figure 44: AARP/New York Life, man who makes hats, 2009
                                                                                      • Figure 45: Farmers Insurance Group Life Insurance, true story about young man, 2009
                                                                                      • Figure 46: Gerber Grow-Up Plan, new fathers in maternity ward, 2009
                                                                                      • Figure 47: HSBC Life Insurance, “un” is in, 2009
                                                                                      • Figure 48: New York Life, dadda to pops, 2008
                                                                                      • Figure 49: Pacific Life, Whaling, 2009
                                                                                  • The Consumer and Life Insurance Ownership

                                                                                      • Key points
                                                                                        • Type of insurance products owned
                                                                                            • Figure 50: Types of insurance owned, by age, August 2009
                                                                                            • Figure 51: Types of insurance owned, by income, August 2009
                                                                                            • Figure 52: Types of insurance owned, by race/Hispanic origin, August 2009
                                                                                            • Figure 53: Types of insurance owned, by marital status, August 2009
                                                                                            • Figure 54: Types of insurance owned, by employment status, August 2009
                                                                                          • Types of life insurance owned
                                                                                              • Figure 55: Types of life insurance owned, by age, August 2009
                                                                                              • Figure 56: Types of life insurance owned, by income, August 2009
                                                                                              • Figure 57: Types of life insurance owned, by race/Hispanic origin, August 2009
                                                                                              • Figure 58: Types of life insurance owned, by marital status, August 2009
                                                                                            • Brand of life insurance owned
                                                                                                • Figure 59: Brand of life insurance owned, by age, August 2009
                                                                                                • Figure 60: Brand of life insurance owned, by income, August 2009
                                                                                                • Figure 61: Brand of life insurance owned, by race/Hispanic origin, August 2009
                                                                                              • Reasons why life insurance is owned
                                                                                                  • Figure 62: Reasons why choose type of life insurance owned, by age, August 2009
                                                                                                  • Figure 63: Reasons why choose type of life insurance owned, by income, August 2009
                                                                                                  • Figure 64: Reasons why choose type of life insurance owned, by race/Hispanic origin, August 2009
                                                                                                  • Figure 65: Reasons why choose type of life insurance owned, by marital status, August 2009
                                                                                                • Face value of life insurance owned
                                                                                                  • Figure 66: Value of life insurance owned, by gender, February 2008-March 2009
                                                                                                  • Figure 67: Value of life insurance owned, by age, February 2008-March 2009
                                                                                                  • Figure 68: Value of life insurance owned, by race/Hispanic origin, February 2008-March 2009
                                                                                                  • Figure 69: Value of life insurance owned, by income, February 2008-March 2009
                                                                                                  • Figure 70: Value of life insurance owned, by marital status, February 2008-March 2009
                                                                                                • Knowledge about different aspects of life insurance
                                                                                                    • Figure 71: Awareness of different features of life insurance, by age, August 2009
                                                                                                    • Figure 72: Awareness of different features of life insurance, by income, August 2009
                                                                                                    • Figure 73: Awareness of different features of life insurance, by race/Hispanic origin, August 2009
                                                                                                  • Recent changes to life insurance policies
                                                                                                    • Figure 74: Made recent changes to life insurance policy, by age, August 2009
                                                                                                    • Figure 75: Made recent changes to life insurance policy, by income, August 2009
                                                                                                • The Consumer and Current Attitudes About Insurance

                                                                                                    • Key points
                                                                                                      • Priority given to different insurance products in the household
                                                                                                          • Figure 76: Importance of different types of insurance, by gender and generation, August 2009
                                                                                                          • Figure 77: Importance of term life insurance, by gender and generation, August 2009
                                                                                                          • Figure 78: Importance of whole/universal/permanent life insurance, by gender and generation, August 2009
                                                                                                        • Reasons for not having life insurance
                                                                                                            • Figure 79: Reasons why do not currently have life insurance, by age, August 2009
                                                                                                            • Figure 80: Reasons why do not currently have life insurance, by income, August 2009
                                                                                                            • Figure 81: Reasons why do not currently have life insurance, by race/Hispanic origin, August 2009
                                                                                                          • Consumers’ views about the current economy
                                                                                                              • Figure 82: Views about the economy, by generation and age, May 2009
                                                                                                              • Figure 83: Views about the economy, by income, May 2009
                                                                                                          • Cluster Analysis

                                                                                                              • Groupers
                                                                                                                • Wonderers
                                                                                                                  • Discerners
                                                                                                                    • Cluster characteristics
                                                                                                                      • Figure 84: Life insurance clusters, August 2009
                                                                                                                      • Figure 85: Types of insurance owned, by life insurance clusters, August 2009
                                                                                                                      • Figure 86: Types of life insurance owned, by life insurance clusters, August 2009
                                                                                                                      • Figure 87: Reasons why choose type of life insurance owned, by life insurance clusters, August 2009
                                                                                                                      • Figure 88: How obtained life insurance, by life insurance clusters, August 2009
                                                                                                                      • Figure 89: Awareness about aspects of life insurance, by life insurance clusters, August 2009
                                                                                                                      • Figure 90: Whether made recent changes to life insurance policy, by life insurance clusters, August 2009
                                                                                                                    • Cluster demographics
                                                                                                                      • Figure 91: Life insurance clusters, by gender, August 2009
                                                                                                                      • Figure 92: Life insurance clusters, by age, August 2009
                                                                                                                      • Figure 93: Life insurance clusters, by income, August 2009
                                                                                                                      • Figure 94: Life insurance clusters, by Hispanic origin, August 2009
                                                                                                                    • Cluster methodology
                                                                                                                    • Appendix: Simmons Mosaic Analysis

                                                                                                                        • Figure 95: Own life insurance, by Mosaic group, February 2008-March 2009
                                                                                                                        • Figure 96: Value of life insurance, by Mosaic group, February 2008-March 2009
                                                                                                                    • Appendix: Other Useful Consumer Tables

                                                                                                                          • Figure 97: Value of whole/universal/variable (face value) life insurance, by leading insurance providers, February 2008-March 2009
                                                                                                                          • Figure 98: Value of whole/universal/variable (face value) life insurance, by leading insurance providers, February 2008-March 2009
                                                                                                                          • Figure 99: Value of term life insurance, by leading insurance providers, February 2008-March 2009
                                                                                                                          • Figure 100: Value of term life insurance, by leading insurance providers, February 2008-March 2009
                                                                                                                          • Figure 101: Life/health insurance industry direct written premium, by line, 2003-08
                                                                                                                      • Appendix: Trade Associations

                                                                                                                        Companies Covered

                                                                                                                        • AEGON USA Inc
                                                                                                                        • AIG Group (American International Group Inc)
                                                                                                                        • Allstate Corporation (The)
                                                                                                                        • American Council of Life Insurance, Inc. (ACLI)
                                                                                                                        • American Council Of Life Insurers
                                                                                                                        • American Family Insurance Group
                                                                                                                        • AXA (USA)
                                                                                                                        • Greenfield Online
                                                                                                                        • HSBC USA Inc.
                                                                                                                        • ING Bank, fsb
                                                                                                                        • Insurance Information Institute Inc.
                                                                                                                        • Liberty Mutual Holding Company Inc.
                                                                                                                        • Liberty National Life Insurance Company
                                                                                                                        • LIMRA International
                                                                                                                        • Manulife Financial Corporation
                                                                                                                        • MassMutual (Massachusetts Mutual Life Insurance Company)
                                                                                                                        • MetLife, Inc. (Metropolitan Life Insurance Company)
                                                                                                                        • National Association of Insurance Commissioners (NAIC)
                                                                                                                        • New York Life Insurance Company
                                                                                                                        • Northwestern Mutual Life Insurance Company (The)
                                                                                                                        • Pruco Life Insurance Company
                                                                                                                        • Prudential Financial, Inc
                                                                                                                        • The Hartford Financial Services Group, Inc.
                                                                                                                        • U.S. Bureau of Labor Statistics
                                                                                                                        • US Department of Labor

                                                                                                                        Life Insurance - US - November 2009

                                                                                                                        £3,199.84 (Excl.Tax)