Life Insurance Industry Recovering from Recession

12/07/2009

People who are wondering whether it's a good time to invest in a life insurance policy can take heart from a recent report noting that the industry is making progress in recovering from financial losses it incurred from the recession.

According to the study from Conning Research and Consulting, the industry can expect after-tax income of $16 billion for 2009, with an estimated $20 billion in capital losses.

"Even with a $16 billion capital infusion in 2009, the industry is still well below pre-crisis 2007 levels, and capital leverage ratios have risen dramatically. The industry will continue to face capital constraints in the short term, even as capital losses abate," wrote analyst Terence Martin in the report.

The insurance industry in general was hit hard in recent months by a sharp decline in the stock market, which has spent much of the year slowly making its way back up to previous levels. The Conning report said that annuities accounted for a $4 billion loss in the current year, marking a reversal from the $12 billion gain that this segment of the industry produced in 2007.

The stability of the life insurance industry is a good sign for consumers who are concerned about the long-term financial prospects of whatever company they choose to open a policy with.

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