Life Insurance: The State of the Industry

Abstract

The life insurance industry in the United States is at a point of dramatic evolutionary change. Some would argue the factors that have altered the industry in the past will accelerate its transformation in the future. The past several decades have been a time of fundamental change in terms of the environment that is facing firms in this industry, the expectations of its customers, and an ever-shifting product line, including substantial proliferation and innovations in product offerings. Shifting attention from the past to the future and gazing into the next century, we can see this transformation accelerating. The confluence of three factors has contributed to movement in this industry: 1) the technological revolution that has been transforming the financial sector; 2) the demographic shift that is part and parcel of the aging of the baby boom generation; and, 3) the constant, indeed ever-increasing, competition in the market for financial services. Together, these features of the life insurance market lead to heightened expectation of change for the industry as a whole, and shifting firm-specific fortunes over the next decade and beyond.