Losing interest: Poor returns on fixed-income assets have contributed towards industry revenue decline

The Life Insurance industry generates revenue from investment returns and premiums. In 2018-19, premium income is estimated to account for 52.8% of revenue, and investment income for 47.2%. Over the five years through 2018-19, revenue is expected to fall at a compound annual rate of 0.5% to £40.9 billion. This includes projected growth of 1.3% in the current year. Premium income fared well over the period, predominantly driven by life and long-term health and critical illness insurance products. Technology has also aided industry growth as automating routine risk has enabled underwriters and product development teams to focus skills on more complex, specialised and unfamiliar tasks...read more.

Industry Statistics & Market Size
Revenue
£40.9bn
Annual Growth 14-19
-0.5%
Forecast Growth 19-24
Profit
Employment
59,763
Businesses
200

Industry Threats & Opportunities

  • Improvements in financial markets are likely to support investment income in the coming years
  • Mobile apps have become increasingly commonplace among insurers, aiding consumer interaction
  • The ageing of the UK population in conjunction with NHS spending pressures is expected to support demand
  • Industry Report - Industry Key Buyers Chapter

    Market share concentration and industry revenue will not match as industry revenue is calculated by combining premium income and investment income, whereas market shares are calculated as a percentage of premium income.IBISWorld estimates that the Life Insurance industry exhibits a high level of concentration because the four largest firms are expected to account for 79.3% of premium income in 2018-19. The biggest players in the market, based on premium income, are Aviva, Legal & General, Prudential and Lloyds. The other large players account for relatively small portions of the market.There has been considerable consolidation activity in the industry over the past five years. Aviva's acquisition of Friends Life Group was the most recent takeover. Con...purchase to read more.

    Additional Insights for the Life Insurance Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Life Insurance Industry are

  • Financial position of the company (as against financial structure)
  • Having an extensive distribution/collection network
  • Must comply with government regulations
  • IBISWorld analysts also discuss how external factors such as FTSE 100 and Real household disposable income in the Life Insurance industry impact industry performance..

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    What's in this report

    What is the Life Insurance Industry?

    Industry firms provide life insurance cover and life-based investment products. Life insurance obliges the insurer to pay designated beneficiaries a sum of money in the event of the insured individual suffering death, disablement, serious illness or injury. As with all insurance contracts, exclusions may apply that limit the insurer’s liability, such as suicide, riot or war.

    Industry Products
  • Annuities
  • Life insurance
  • Disability and long-term care insurance
  • Industry Activities
  • Providing term life insurance
  • Providing permanent life insurance
  • Providing annuities
  • Providing life-based savings and investment schemes
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • FTSE 100
  • Real household disposable income
  • year bond rate
  • Business confidence index
  • Population aged 18 to 64 years

  • Current Performance
  • Investment income
  • Premium income

    and demand

  • Technology
  • Regulatory pressures
  • Pricing, regulation and restructuring
  • Market structure

    and profit

  • Chart: Revenue Growth

  • Industry Outlook
  • Investment income
  • Premium income
  • Technology
  • Competition and globalisation
  • Future challenges
  • Table: Life Insurance Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Life Insurance Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Stone Quarrying
  • Petroleum Refining
  • Consumers

  • Key Selling Industries
  • Fund Management Activities
  • Insurance Agents & Brokers
  • Other Activities Auxiliary to Insurance and Pension Funding
  • Reinsurance

  • Products & Services
  • Life insurance
  • Annuities
  • Disability and long-term care insurance
  • Chart: Life Insurance Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Retail market
  • Commercial market
  • Chart: Major Market Segmentation for the Life Insurance Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPolicy payments and claimsWagesUnderwriting expensesCommission and brokerage costsOther expensesReinsurance
  • Chart: Cost Structure Benchmarking – Sector vs Life Insurance

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Life Insurance Industry

  • Industry Globalization
    Aviva plc, Legal & General Group plc, Prudential plc, Lloyds Banking Group plc,
  • Table: Aviva plc - financial performance
  • Table: Legal & General Group plc - financial performance
  • Table: Prudential plc - financial performance
  • Table: Lloyds Banking Group plc - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Life Insurance Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Life Insurance Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Bancassurance
  • A partnership between a bank and insurance company whereby the insurance company uses the bank's sales channels in order to sell insurance products.
  • Combined Ratio
  • A measure of profitability used by an insurance company to indicate how well it is performing. It is calculated by dividing incurred losses and expenses by premiums earned.
  • Life Office
  • A company that sells life insurance.
  • Ogden Rate
  • A discount rate used to determine how much insurance firms should pay out to those who have suffered life-changing injuries, or death, in order to cover all their predicted future losses.
  • Permanent Policies
  • These combine life cover with a savings component that allows the policyholder to accrue cash in the policy that can be borrowed or distributed.
  • Term Life Insurance
  • This provides a predetermined lump sum if the event insured against occurs during a specified period of time.
  • Underwriting
  • The process of measuring risk and determining the premium that needs to be paid to insure that risk.
  • What Our Customers Say

    Why buy this report?

    The Life Insurance market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Life Insurance:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Life Insurance market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Life Insurance, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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