WSJ: "Life Insurance Is profitable again, but too late for many insurers."

New York Life | April 20, 2023

A recent article in the Wall Street Journal, by writer Leslie Scism, describes how many publicly held insurance companies exited the business of selling individual life insurance when prolonged low interest rates hit both their profits and stock prices. 

  • Companies that have fared well in the recent low-interest-rate environment have been mutually owned insurers, including New York Life. The article states: “Owned by their policyholders*, these companies don’t face Wall Street’s quarterly earnings pressure, and because they can take a long-term view, have more flexibility in profit-margin goals. Also, they kept their agents, who sit at kitchen tables and give consumers the confidence to buy a typically sold-not-bought product.”  
  • The article also notes: “As insurers exited or cut back, market share shifted. Premium volume for individual-life policies for publicly traded and other for-profit, non-mutual companies fell 22% between 2007 and 2022, to $83.32 billion, according to AM Best. At the same time, volume more than doubled at mutuals, to $77.9 billion. Combined, volume was up 14%.”

Read the entire article at the Wall Street Journal (subscription required).

*New York Life Insurance Company is a mutual insurance company, which means it is not publicly traded and has no shareholders. References to ownership refer to NYLIC's policyowners who purchase its participating products. These policyowners share certain membership rights, such as voting in board of directors elections and being eligible to share in annual dividends that are declared by the board. NYLIC is also the parent company of other wholly owned life insurance subsidiaries. Policies issued by these subsidiaries are not participating and do not share in these rights.


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