12 Best Life Insurance Companies

Habib Ur Rehman
9 min read

In This Article:

In this article, we take a look at the 12 best life insurance companies. You can skip our detailed analysis of the insurance industry and go directly to 5 Best Life Insurance Companies.

The global life insurance industry is experiencing a slowdown due to the ongoing economic downturn. It is especially true for term-life policies since high inflation risks decreasing the death benefit. 

Regardless, the industry is grounded across the world, and especially in the US, with three in four Americans having some sort of life insurance policy according to a Forbes survey. 

The life insurance industry has grown at a relatively faster pace in the developing world, with the expansion of its middle class. Figures from McKinsey show that the developing world has added 52% in the growth of global premium in the past decade. 

Industry Analysis

McKinsey’s 2023 Insurance report shows a significant gap between economic growth and premium growth around the world. For instance, the US and the EU had a nominal GDP growth at a CAGR of 5% in the past 20 years. However, life insurance premiums grew at a CAGR of only 2%. 

There are several reasons for this. The most important one being the problem of cost base. Cost, as a share of revenue, has increased by 23% in the life insurance industry since 2003. For comparison, it has only increased by 5% in the Property and Casualty Insurance industry. 

This, combined with high earnings-volatility, low performance mobility and risk opacity has largely driven investors away from the industry. This trend is reflected in the life-insurance industry's market cap in the US relative to other financial services. It decreased from 40% in 1985 to 17% in 2005, to just 9% in 2020. 

However, some new trends might change things for the better. For example, numerous life insurance companies have moved away from affiliated distribution due to increased commoditization of the insurance products. 

Affiliated distributors have lost the market by 4% in the past decade, per the iii.org. Conversely, independent distributors have gained popularity, with their market share increasing from 44% in 2012 to 50% in 2021. The trend is smoothed out across the world. 

Another key statistic from iii.org reveals that traditional life insurance has also lost mainstream popularity in favor of life/annuity policies, which made up 48% of premiums written in the year 2021. 

Future Outlook

According to Research and Markets, the global life insurance market is expected to grow at a modest CAGR of 4.4% and reach $3.5 trillion in value by 2025. Further, it is projected to reach $4.2 trillion in 2030, growing at a CAGR of 3.7% during the forecast period of 2025-2030.

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