United States Insurance Report Q1 2016
BMI View: The large and well-established insurance market in the US is set to benefit from a positive domestic economy environment, as the US economy is bolstered by lower oil prices, a tightening labour market and improving investor sentiment, although rising external headwinds will see that growth remains relatively subdued.
Both the life and non-life insurance sectors are very well-developed in the US where a large number of firms are active in the market with one of the broadest product offerings available globally.
Premiums written in both sectors are forecast to increase steadily throughout the forecast period, though faster expansion in the life sector will see it gain some market share from the larger non-life insurance sector by the end of the current forecast period in 2019.
Key Updates And Forecasts
The health insurance sector has seen the announcement of several mega mergers in 2015, including that of Cigna with Anthem and Aetna with Humana prompting concerns that health insurance premiums in many states will increase rapidly particularly in light of rising pharmaceutical costs - though the House Oversight and Government Reform Committee plans to hold hearings regarding potential capping of drug prices in early 2016.
Economic growth in the USA is driving expansion of the already large life insurance sector.
We expect life premiums to grow by around 4% annually throughout the forecast period to reach USD600.2bn in 2019, up from USD510.2bn in 2015.
The slightly large non-life sector is also expected to record steady growth, albeit at a slightly slower rate of around 3.5% annually.
Non-life insurance premiums are therefore forecast to reach USD871.1bn in 2019, up from USD757.0bn in 2015.
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