August 27th, 2018

The Life Insurance Industry Needs a Lifeline

Posted at 1:00 AM ET

johnwhitworth_oliverwJohn Whitworth, Partner, Oliver Wyman


The life insurance industry appears healthy enough with plenty of capital and booming sales. A quick look under the hood, however, and it becomes clear that the industry’s profitability has been declining for some time.

The life insurance industry was once supported by a raft of highly attractive products including endowments and investment bonds; the changing nature of tax rules, regulation and the market means that many of these profitable products are no longer in demand. This has had a major impact on return. Open strategic business lines are now insufficiently profitable to replace the runoff of the legacy book. In consequence, the life industry finds itself facing some very uncomfortable decisions.

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