Gen Re on the state of the US group term life market

Gen Re on the state of the US group term life market | Insurance Business Australia

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Gen Re on the state of the US group term life market

How did the sector perform in the past year?

Reinsurance

By
Kenneth Araullo

Gen Re has released the results of the 2023 US Group Term Life Market Survey, delivering its verdict on the sector’s performance in the past year.

The annual survey covers group term life (GTL) and accidental death & dismemberment (AD&D) in-force and new sales results for the US market, representing both employer-paid and employee-paid business.

Twenty-six companies provided GTL results, while 24 companies provided AD&D results.

For 2023, total GTL and AD&D in-force premium reached $33.7 billion, with GTL representing 93% of the total. GTL in-force premium growth rates have slowed since a peak of 6% in 2021, with a 2% increase in 2023.

AD&D in-force premium continued to grow positively, rising by 6% in 2023, the highest rate since 2017. Overall, GTL and AD&D in-force premium increased by 2% year-over-year. Seven of the top 10 carriers reported positive GTL in-force premium growth in 2023.

In 2023, participating companies reported $3.2 billion in combined GTL and AD&D sales premium, with GTL accounting for 92% of the total. GTL new sales premium declined by 3% in 2023, attributed to a few carriers experiencing double-digit declines.

AD&D sales premium – how did it fare in 2023?

The top 10 companies held 84% of the market share for new sales premium, contributing approximately $2.4 billion of the total 2023 sales. AD&D sales premium remained positive over the past five years, with 11 of the 24 companies reporting positive changes in their 2023 results, and seven experiencing double-digit growth. Combined GTL and AD&D sales premium declined by 2% in 2023.

GTL new sales case counts grew by 1% in 2023, and in-force case counts also increased by 1%. For companies providing sales case size breakdown information, the 10–99 category accounted for the highest percentage of cases (56%), followed by the 1–9 grouping (25%).

Results were similar for in-force cases (52% and 30%, respectively), with less than 1% in the 5,000+ range for both sales and in-force. New sales lives increased by 5% in 2023 after a decline in 2022, and in-force lives grew by 6% year-over-year.

Average face amounts for new sales declined by 4% in 2023, while in-force average face amounts remained flat year-over-year. Monthly premium rates for new sales declined by 6%, with in-force premium rates staying level. Average premium per life declined for both new sales and in-force business. Sixty per cent (60%) of companies saw a decline in their average face amount for new sales in 2023.

A small number of companies with negative growth strongly influenced the average premium per life for new sales, although 61% of companies reported positive growth.

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