For the first time in four years, it’s expected that direct premiums and considerations for U.S. life and health insurance will actually fall.

According to projections from a new S&P Global Market Intelligence report, regulatory uncertainty stands in the way of sales of certain types of individual annuities.

The 2017 U.S. Life and Health Insurance Market Report, which provides a five-year outlook on U.S. life, annuity and accident and health premium volumes, finds that uncertainty over the eventual fate of the Department of Labor’s fiduciary rule will likely result in a decline in ordinary individual annuity considerations of 11.5 percent.

Direct premiums and considerations across the life, annuity and accident and health business lines, the report finds, were approximately $654.6 billion in 2017, down 1.2 percent from 2016’s record result of $662.6 billion.

S&P Global Market Intelligence is also projecting, in future years, that growth in direct premiums and considerations will be in the low- to mid-single-digit percentage range, “in reflection of an expected rebound in annuity sales.”

Other findings in the report include expected low-single-digit growth in direct life insurance premiums, including 2.2 percent in 2017.

Also, the report projects a drop of 6.3 percent in first-year and single-premium direct premiums and considerations—that’s faster than overall direct premiums and considerations. That reflects, it says, “S&P Global Market Intelligence’s view of the effect of lower sales of indexed and variable annuities.”

An aging population and the challenges people face in saving for retirement, it adds, will drive demand for industry products, while the solutions the industry offers will be boxed in by profitability concerns in a low-interest-rate environment.

That’s visible, it adds, in the plunging sales of individual long-term care policies.

And although carriers continue to look for rate increases on in-force LTC policies, the lack of new sales and companies’ profitability concerns have pushed numerous insurers to exit the market.

Instant Insights /

Direct premium drop expected for life, health coverage

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