Term Life Insurance Articles
Life Insurance Industry Remains Profitable In 2009
2009-12-03
The life insurance industry took a particularly hard blow, like many other businesses, due to the economy. However, even with this hard hit, life insurance companies have still managed to pull themselves up relatively well during 2009. Though the economy has decreased the number of individuals who are looking to purchase term life insurance, these businesses have managed to remain afloat, whilst other businesses have failed.
In 2007, before the economic crisis, the life insurance industry managed to have a net, after-tax statutory income of over $32 billion. While the industry has not managed to produce such staggering incomes this year, they have still managed to make $16 billion despite the earlier losses of $20 billion. But while this is a step in the right direction, analysts point out that the industry will still be forced to put constraints on their spending. "Even with a $16 billion capital infusion in 2009, the industry is still well below pre-crisis 2007 levels, and capital leverage ratios have risen dramatically," said Terence Martin, an analyst at Conning Research & Consulting. "The industry will continue to face capital constraints in the short term, even as capital losses abate." Still, the $16 billion income does quite a lot to help restore faith in the insurance companies.
According to the forecast produced by the Conning Research study, "Life-Annuity Forecast & Analysis 2009-2011," it is expected that a substantial amount of the funds set aside by the industry in 2008 in order to cover the individual annuity minimum guarantees will be partially released. Over the past two years, the annuities have been the most volatile portion of the life insurance industry. Annuities are what generated the $4-billion loss over the combined 2008-2009 period. In 2007, before the economic crisis, annuities generated $12 billion in gain. But, while the annuities portion of the industry has had its ups and downs, there is one part of the industry that has remained solid over the years, even with the economic situation. Life insurance products have generated over $8 billion of net gain during the 2009 year. This is directly in line with the gain seen over previous years.
So while the industry may be a little shaky, like many industries in this economic crisis, it has continued to be a profitable endeavor. Though annuity losses have been a major blow to the industry, the remarkable comeback has helped to ensure that the industry will remain firm and profitable. So, if you have been considering getting a life insurance quote, but have not been sure about the stability of the industry, there's little to fear. It seems that the industry will continue to remain "above water" for the near future.
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The life insurance industry took a particularly hard blow, like many other businesses, due to the economy. However, even with this hard hit, life insurance companies have still managed to pull themselves up relatively well during 2009. Though the economy has decreased the number of individuals who are looking to purchase term life insurance, these businesses have managed to remain afloat, whilst other businesses have failed.
In 2007, before the economic crisis, the life insurance industry managed to have a net, after-tax statutory income of over $32 billion. While the industry has not managed to produce such staggering incomes this year, they have still managed to make $16 billion despite the earlier losses of $20 billion. But while this is a step in the right direction, analysts point out that the industry will still be forced to put constraints on their spending. "Even with a $16 billion capital infusion in 2009, the industry is still well below pre-crisis 2007 levels, and capital leverage ratios have risen dramatically," said Terence Martin, an analyst at Conning Research & Consulting. "The industry will continue to face capital constraints in the short term, even as capital losses abate." Still, the $16 billion income does quite a lot to help restore faith in the insurance companies.
According to the forecast produced by the Conning Research study, "Life-Annuity Forecast & Analysis 2009-2011," it is expected that a substantial amount of the funds set aside by the industry in 2008 in order to cover the individual annuity minimum guarantees will be partially released. Over the past two years, the annuities have been the most volatile portion of the life insurance industry. Annuities are what generated the $4-billion loss over the combined 2008-2009 period. In 2007, before the economic crisis, annuities generated $12 billion in gain. But, while the annuities portion of the industry has had its ups and downs, there is one part of the industry that has remained solid over the years, even with the economic situation. Life insurance products have generated over $8 billion of net gain during the 2009 year. This is directly in line with the gain seen over previous years.
So while the industry may be a little shaky, like many industries in this economic crisis, it has continued to be a profitable endeavor. Though annuity losses have been a major blow to the industry, the remarkable comeback has helped to ensure that the industry will remain firm and profitable. So, if you have been considering getting a life insurance quote, but have not been sure about the stability of the industry, there's little to fear. It seems that the industry will continue to remain "above water" for the near future.
