Life insurance - Worldwide

Worldwide

The Life insurance market market worldwide is projected to reach a market size (gross written premium) of US$3.67tn in 2024.
The average spending per capita in the Life insurance market market is expected to amount to US$0.47k in the same year.
The gross written premium is projected to show an annual growth rate (CAGR 2024-2028) of 1.66%, resulting in a market volume of US$3.92tn by 2028.
In global comparison, the United States is anticipated to generate the highest gross written premium, amounting to US$1,271.0bn in 2024.
In recent years, the life insurance market in countries with high aging populations, such as Japan, has experienced significant growth due to increased demand for retirement planning and long-term financial security.

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Analyst Opinion

The life insurance market, as a distinct segment within the insurance industry, faces its own unique set of challenges and opportunities. Today, several notable trends are reshaping the landscape of life insurance, while key indicators offer insights into its performance and stability.

Trends on the market:

Digitalization of Life Insurance: The life insurance sector is embracing digital innovation to enhance processes like underwriting, policy management, and customer engagement. Digital tools, data analytics, and online platforms are transforming how life insurance is delivered to policyholders.
Customized Life Insurance Products: Life insurers are increasingly personalizing policies to cater to individual customer needs. Advanced data analytics and predictive modeling are facilitating precise risk assessment, leading to tailored pricing and coverage options for policyholders.
Long-Term Care and Retirement Solutions: With an aging population, there's a growing demand for life insurance products that address long-term care and retirement needs. Insurers are crafting innovative solutions to support the financial well-being of retirees and seniors.
Sustainability and ESG-Focused Life Insurance: Environmental, Social, and Governance (ESG) considerations are gaining prominence in the life insurance realm. Insurers are now offering ESG-focused life insurance policies that align with customers' ethical values and promote positive social and environmental impacts.
Regulatory and Compliance Landscape: Evolving regulations specific to life insurance, including changes in taxation and consumer protection, influence product development and sales practices. Staying compliant with these evolving regulations is essential for life insurers.

Underlying indicators:

Demographic Dynamics: Changes in population age distribution and shifts in family structures have a direct impact on the demand for various life insurance products. Life insurers must adapt their offerings to suit evolving demographic trends.
Investment Performance: Life insurers manage substantial investment portfolios to meet policyholder obligations. The performance of these investments, particularly in a low-interest-rate environment, significantly influences the industry's financial stability.
Economic Influences: Economic indicators, such as inflation, employment rates, and GDP growth, shape the affordability and demand for life insurance products. These economic factors play a pivotal role in pricing and strategy decisions.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on gross written premium, gross written premium per capita, gross claim payments, loss ratio, and distribution channels.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market layer. As a basis for evaluating markets, we use industry associations, national statistic offices, and international organizations, such as OECD. Next we use relevant key market indicators and data from country-specific associations such as insurance consumer spending, gross domestic product, insurance - consumer price index (CPI), population growth. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing and HOLT-linear. The main drivers are insurance consumer spending and insurance - consumer price index (CPI).

Additional Notes:

The market is updated twice per year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.