2021: Life-Annuity Consumer Markets
§ The Covid-19 pandemic has greatly affected the consumer market, with differing market segments being impacted in different ways both in increased mortality and economic disruption. This has created both opportunities and challenges for life-annuity insurers.
§ The life insurance protection gap has widened to a relatively large amount, $23.4 trillion, which is equivalent to over 60% of the current in force individual life insurance.
§ All three adult generations saw increased mortality, though most excess mortality for Baby Boomers came from Covid-19, while younger adults (Generation X and Millennials) had excess mortality driven by non-Covid-19 causes, potentially a result of economic pressure on these segments.
§ Three major cultural markets in the U.S. (Hispanics, African-Americans, and Asian-Americans) saw excess mortality disproportionate to the overall population, with some differences driven by differing geographic impacts. These three segments have long been underinsured compared to the rest of the U.S. consumer markets and are key to future insurer growth.
1. Introduction
2. Executive Summary
3. Measuring the Insurer Opportunity
² Key Takeaways
² Quantifying the Life Insurance Opportunity
² Quantifying the Retirement Market Opportunity
² Protection Gaps: Significance for Insurers
² Putting the Pieces of the U.S. Market Together
4. Affluent and Middle Markets
² Affluent and Middle Market Key Takeaways
² Wealth and Income Growth Rates Drive Segmentation
² Economic Segmentation of the Market
² The Affluent Market
² The Middle Market
5. Baby Boomers
² Baby Boomer Key Takeaways
² Generations and Life Stages
² Covid-19 Impact
² Demographic Profile
² Shrinking Generation, Shifting Needs
² Life Insurance Needs for Seniors
² Retirement Income Opportunities for Insurers: Rising Tide
² Opportunities and Challenges
6. Generation X
² Key Takeaways
² Sandwich Generation
² Covid-19 Impact
² Demographic Profile
² Peak of Income, Peak of Pressures
² Opportunities and Challenges
7. Millennials
² Key Takeaways
² Covid-19 Impact
² Demographic Profile
² Delayed Development—Lower Employment, Lower Income
² Opportunities, Challenges, and Consumer Expectations
8. Hispanic Market in the U.S.
² Key Takeaways
² Covid-19 Impact
² Demographic Profile
² Geographic Distribution
² Opportunities, Challenges, and Consumer Expectations
9. African-American Market
² Key Takeaways
² Covid-19 Impact
² Demographic Profile
² Geographic Distribution
² Opportunities and Challenges
10. Asian-American Market
² Key Takeaways
² Covid-19 Impact
² Demographic Profile
² Geographic Distribution
² Opportunities and Challenges
Introduction
In recent years, the life insurance and annuity industry in the U.S. has found the path to strong growth elusive. Sales and premium for life insurance have been sluggish in pre-pandemic years. As Baby Boomers age into retirement, insurers have been struggling to attract new customers as they lag other financial institutions in meeting the new consumer landscape.
This study is part of a series investigating the U.S. life-annuity consumer. In this series, we review major trends in the U.S. population, concentrating on aspects that can have an impact on the individual life-annuity industry.