U.S. Life Insurance Market Expected to reach $1,476.31 billion by 2032 - Allied Market Research

According to a recent report published by Allied Market Research, titled, “U.S. Life Insurance Market by Type and Distribution Channel: Global Opportunity Analysis and Industry Forecast, 2023–2032,” the U.S. life insurance market was valued at $ 765.38 billion in 2023 and is projected to reach $ 1,476.31 billion by 2032, growing at a CAGR of 7.1% from 2024 to 2032.

A life insurance policy is a legally-binding agreement that provides the policyholder a death benefit in the occurrence of the covered person's death. The policyholder of a life insurance policy must pay an initial premium as well as ongoing payments for the policy to stay in service. In addition, there are two main categories of life insurance policies such as term life insurance and permanent life insurance. Term life insurance policies expire after a certain number of years. Permanent life insurance policies remain active until the insured person dies, stops paying premiums, or abandons the policy. Moreover, the digital technologies such as AI, data analytics and other technologies are increasingly transforming the life insurance industry. By implementing digital technologies, insurers can enhance customer experience and efficiency in client acquisition, underwriting, claims processing, and policy administration. Overall, the U.S. life insurance market is driven by the need for intelligent and automated systems that can process and analyze vast amounts of data in real-time, enabling organizations to make informed decisions and take actions based on data-driven insights.    

Furthermore, major market players are undertaking various strategies to increase the competition and offer enhanced services to their customers. For instance, in November 2022, Prudential Financial, Inc. launched Prudential FlexGuard Life, an innovative indexed variable universal life product that offers a flexible combination of protection, growth, and access to meet consumers’ changing life insurance needs. It includes death benefit protection with guaranteed duration options, multiple ways to grow cash values and the ability to accelerate death benefits in the event of a chronic or terminal illness if an additional volunteer has been added.

The U.S. life insurance market is currently experiencing significant growth, primarily driven by the rise in adoption for life insurance services among individuals, owing to the rise in awareness about life insurance policies among individuals. With a greater understanding of the benefits that life insurance can provide, more people are opting to secure coverage to protect their families and assets, thereby driving the growth of the market. The increasing investments by public and private companies further fuel the growth of the U.S. life insurance market. 

However, enforcement of strong rules by banks and financial institutions for providing insurance services, is certainly restraining the adoption of life insurance solutions across the U.S. Strong rules and restrictions implemented by several banks and financial service providers to offer life insurance services is further expected to restrict the growth of the market across the U.S. The process of insurance services can be complicated since it may need to operate with several platforms, databases, and technologies, which in turn are expected to hinder the market growth. However, technological advancements in life insurance services are anticipated to emerge as a lucrative opportunity for the growth of the U.S. life insurance market.  

By distribution channel, the insurance brokerage and agencies segment is expected to garner a significant share during the forecast period. The proliferation of digital technology has helped agencies to offer the products directly to consumers through online platforms, mobile apps, and digital marketing channels. Customers may easily investigate, evaluate, and purchase life insurance products from the smartphones. However, the direct from insurer segment is expected to witness growth at the highest rate during the forecast period. The insurance industry is undergoing significant digital transformation. Online platforms and mobile applications enable insurers to reach customers directly, offering a seamless and convenient purchasing experience.

Technological Trends

The increasing use of data analytics and artificial intelligence (AI) in underwriting and risk assessment processes. Insurers are leveraging advanced analytics tools to analyze vast amounts of data from various sources. AI algorithms are also being employed to automate claims processing, detect fraudulent activities, and improve overall operational efficiency in the life insurance sector.

Another key technological trend in the U.S. life insurance market is the adoption of blockchain technology for enhancing transparency, security, and efficiency in transactions. Blockchain enables secure and tamper-proof record-keeping of insurance policies, claims, and other relevant information, reducing the risk of fraud and ensuring data integrity. By utilizing blockchain, insurers can streamline processes, facilitate faster settlements, and enhance trust among stakeholders in the life insurance ecosystem.

Furthermore, the emergence of Internet of Things (IoT) devices and telematics solutions is revolutionizing risk management practices in the U.S. life insurance market. IoT sensors installed on insurance agencies can collect real-time data on customer behavior, and other critical parameters, enabling insurers to monitor risks proactively and offer personalized insurance products based on actual usage patterns. Telematics solutions also facilitate preventive maintenance, safety monitoring, and incident response, contributing to improved safety standards and reduced insurance claims in the life insurance sector.

KEY FINDINGS OF THE STUDY

• By type, the general annuity segment accounted for the U.S. life insurance market share in 2023.
• By distribution channel, the insurance brokers and agencies segment accounted for the U.S. life insurance market share in 2023.

The key players profiled in the U.S. life insurance market analysis are Prudential Financial, Inc, MetLife Services and Solutions, LLC, New York Life Insurance Company, The Manufacturers Life Insurance Company, The Northwestern Mutual Life Insurance Company, Teachers Insurance and Annuity Association of America, Athene, Corebridge Financial, Inc., Massachusetts Mutual Life Insurance Company, and Great-West Lifeco Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the U.S. life insurance industry.