Triple-I Insurance Facts

Key Facts

  • Underwriting annuities is now the primary business for life insurers rather than traditional life insurance, accounting for 48 percent of life/annuity direct premiums written in 2021.
  • Net income after taxes for the life/annuity insurance industry fell 50.5 percent in 2020, to $22.2 billion from $44.7 billion in 2019, according to S&P Global Market Intelligence.

Life/Annuity/Accident and Health Sector

Traditional life insurance products such as universal life and term life for individuals, and group life, remain an important part of the business, making up 25 percent of direct premiums written.

Traditional life insurance is no longer the primary business of many companies in the life insurance industry. The emphasis has shifted to underwriting annuities, which accounted for 48 percent of life/annuity direct premiums written in 2021. Annuities are contracts that accumulate funds or pay out a fixed or variable income stream. The income stream can be for a set period or over the lifetime of the contract holder or beneficiaries. Accident and health insurance, which includes distinctive products apart from traditional health insurance, account for 26 percent of direct premiums written. In addition to annuities, accident and health, and life insurance products, life insurers may offer financial services such as asset management.

Traditional health insurance, which is not included in this section and is not considered a part of the life/annuity sector, is described under Private Health Insurance. Health insurance pays for medical, surgical and hospital services received by the insured, as well as routine and preventive care, usually within a network format. Of the many types of plans available, most include a deductible paid by the insured, and benefits received are tax-free.

Accident and health insurance, a product provided by the life/annuity and property/casualty (P/C) sectors, encompasses a variety of specialty products related to health, such as reimbursement for the time a policyholder spent in a hospital or was disabled; short- and long-term disability based on employment; long-term care, and critical or catastrophic illness insurance. Accident and health insurance is not meant to replace health insurance.

2020 Financial Results

Net income after taxes for the life/annuity insurance industry fell 50.5 percent in 2020 to $22.2 billion from $44.7 billion in 2019, according to S&P Global Market Intelligence. Contributing to the decline in net income after taxes was a 36.2 percent decline in net income before capital gains and a capital loss of $10.7 billion. Premiums and annuity considerations fell 7.9 percent in 2020, following substantial growth in 2019, as annuity premiums and deposits, the largest sector for revenue, fell 13.3 percent. Expenses fell slightly in 2020, down 2.1 percent. Capital and surplus rose to $440.0 billion in 2020, up 4.3 percent from $421.7 billion in 2019, according to S&P Global Market Intelligence.

Life/Annuity Insurance Income Statement, 2016-2020

($ billions, end of year)

  2017 2018 2019 2020 2021 Percent change,
2020-2021 (1)
Revenue            
Life insurance premiums $137.1 $145.1 $151.0 $143.1 $159.5 11.5%
Annuity premiums and deposits 287.2 269.7 339.8 294.6 285.8 -3.0
Accident and health premiums 169.3 183.1 185.0 184.7 189.2 2.4
Credit life and credit accident and health premiums 1.3 1.3 1.4 1.2 1.2 0.0
Other premiums and considerations 2.1 4.0 (2) (2) (2) 0.0
Total premiums, consideration and deposits $597.1 $603.2 $679.4 $625.7 $637.8 1.9%
Net investment income 182.3 187.4 186.7 186.0 200.8 8.0
Reinsurance allowance -25.1 32.0 -29.7 -22.8 8.5 NA
Separate accounts revenue 36.6 37.3 36.8 37.4 41.0 9.8
Other income 49.2 44.0 48.7 55.0 57.5 4.6
Total revenue $839.9 $903.9 $921.9 $881.2 $945.7 7.3%
Expense            
Benefits 281.4 289.5 301.8 314.2 338.4 7.7
Surrenders 308.9 350.3 339.6 323.4 362.7 12.2
Increase in reserves 106.4 143.3 120.6 109.8 89.8 -18.2
Transfers to separate accounts -65.8 -89.6 -72.0 -69.2 -75.6 9.2
Commissions 58.0 58.3 61.2 60.1 64.5 7.3
General and administrative expenses 65.9 65.9 67.8 67.0 69.4 3.5
Insurance taxes, licenses and fees 8.8 10.7 9.3 11.5 10.1 -12.3
Other expenses -4.1 11.3 14.4 8.4 14.8 76.5
Total expenses $759.4 $839.7 $842.8 $825.2 $873.9 5.9%
Policyholder dividends 17.5 18.2 18.1 18.0 17.8 -1.3
Net gain from operations before federal income tax 63.0 46.0 61.0 38.0 53.9 41.8
Federal income tax 12.4 3.4 9.4 5.1 8.2 59.7
Net income before capital gains $50.6 $42.6 $51.6 $32.9 $45.7 39.0%
Net realized capital gains (losses) -8.6 -4.7 -6.9 -10.7 -8.3 -22.8
Net income $42.1 $37.9 $44.7 $22.1 $37.4 68.9%
Pre-tax operating income 63.0 46.0 61.0 38.0 53.9 41.8
Capital and surplus, end of year 395.0 399.9 421.7 440.5 475.9 8.0

(1) Calculated from unrounded data.
(2) Data not available.

NA=Not applicable.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

View Archived Tables

Annuities are the largest life product line as measured by direct premiums written, account for 48 percent of direct premiums written by life insurers in 2021. Accident and health insurance comprise 26 percent of direct premiums written. Life insurance accounted for the remaining 25 percent of direct premiums written.

Direct Premiums Written By Line, Life/Annuity Insurance, 2019-2021

($000)

  2019 2020 2021
Lines of insurance Direct premiums
written (1)
Percent
of total 
Direct premiums
written (1)
Percent
of total 
Direct premiums
written (1)
Percent
of total 
Annuities            
Ordinary individual annuities $217,475,954 28.6% $206,548,091 26.9% $237,429,226 28.9%
Group annuities 148,066,084 19.5 163,115,551 21.3 160,156,376 19.5
Total $365,542,038 48.1% $369,663,642 48.2% $397,585,602 48.4%
Accident and health (3)            
Group 139,371,108 18.4 140,591,891 18.3 144,355,085 17.6
Other 63,764,322 8.4 68,034,862 8.9 71,246,227 8.7
Credit 889,583 0.1 725,330 0.1 761,493 0.1
Total $204,025,013 26.9% $209,352,084 27.3% $216,362,804 26.4%
Life            
Ordinary life 149,042,367 19.6 148,026,526 19.3 163,998,690 20.0
Group life 39,744,272 5.2 39,205,456 5.1 41,984,740 5.1
Credit life (group and individual) 810,896 0.1 687,128 0.1 744,296 0.1
Industrial life 74,820 (3) 85,053 (3) 76,881 (3)
Total $189,672,356 25.0% $188,004,163 24.5% $206,804,608 25.2%
All other lines 39 (2) 72 (2) 283 (2)
Total, all lines (4) $759,239,446 100.0% $767,019,961 100.0% $820,753,297 100.0%

(1) Before reinsurance transactions.
(2) Less than 0.1 percent.
(3) Excludes accident and health premiums reported on the property/casualty and health annual statements.
(4) Excludes deposit-type funds.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

View Archived Tables