2023 Life Reinsurance Survey

By Anthony Ferraro and Lloyd Spencer

Reinsurance News, December 2024

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About the Survey

The SOA Reinsurance Section has completed its 2023 Life Reinsurance Survey, an annual assessment of the individual life and group life reinsurance market data of U.S. and Canadian life insurers. Survey results are based on financial information self-reported by the reinsurers of their reinsurance business assumed, and includes new business and portfolio production and in-force figures broken into the following categories:

Recurring reinsurance: Conventional reinsurance covering insurance policies with issue dates in the year reinsured. For example, insurance policies issued and reinsured in 2023.
Portfolio reinsurance: Reinsurance covering insurance policies with issue dates in a year prior to the year in which they were reinsured (whether traditional or financial reinsurance). For example, consider a group of policies issued from the period 2016–2019 but reinsured in 2023.
Recurring Retrocession reinsurance: Reinsurance of business not directly issued by the ceding company, with issue dates in the year in which it was retroceded (for example, insurance policies issued, reinsured, and retroceded in 2023).
New for this year’s survey is Portfolio Retrocession reinsurance: Reinsurance of insurance policies with issue dates in a year prior to the year in which they were retroceded (for example, issued prior to 2023 but retroceded in 2023).

The latter two categories represent business that is usually ceded by a reinsurer, and can be thought of as “reinsurance of reinsurance,” or retrocession. Individual life results are based on net amount at risk, while the group life results are based on premium in force. The figures are quoted in the currency of origin. All traditional life reinsurers in North America were contacted and chose to participate in this year’s survey. Table 1 summarizes the results from the 2023 SOA Reinsurance Section’s Life Reinsurance Survey.

Table 1
U.S. and Canadian Reinsurance Landscape

*NOTE: The Canadian Group Retrocession amounts (Recurring and Portfolio) are too small to display

The remainder of this article discusses this year’s results in more detail, analyzes overall life reinsurance trends, and looks ahead to issues to be considered in future surveys.

United States—Individual Life

Recurring New Business

Recurring individual life new business volume in 2023 grew for the eighth consecutive year, from U.S.$621.1 billion in 2022 to U.S.$661.9 billion in 2023 (a 6.6% increase). One contributing factor to the increased volume of U.S. individual life reinsurance is the continued growth in accelerated underwriting programs, and the expansion of face amounts available under these programs. These factors elicit support from reinsurers in product and program development, as well as in risk sharing.

Figure 1 shows the annual percentage change in U.S. recurring new business production over the last 10 years, illustrating sustained upward trends over the past six years. Since the end of the most recent decline in the U.S. individual life reinsurance market in 2015, individual life recurring new business has grown at a compound annual growth rate of just over 6 percent.

Figure 1
U.S. Percentage Change in Recurring New Business 2014–2023

In 2023, just under 82 percent of recurring new business volume was yearly renewable term (YRT) and just over 18 percent was coinsurance, remaining consistent with prior years’ survey results.

To estimate an overall cession rate for the life reinsurance industry, we compare new direct life sales to new recurring reinsurance production. According to LIMRA,[1] direct individual life insurance sales in 2023 rose by 6.9 percent (based on face amount), reversing the single-year drop observed in 2022. Taking these figures together with the surveyed life reinsurance production levels results in an estimated cession rate for the industry of 34 percent for 2023, matching the rate observed in 2022. As seen in Figure 2, the estimated cession rate increased steadily from a low of 25 percent in 2015 to 34 percent (first observed in 2022).

Figure 2

The top five U.S. individual life reinsurers by market share represent 83 percent of 2023 reinsurance production (the same as in the prior two survey years)—see Table 2 for the information by reinsurer.

Table 2
U.S. Recurring Individual Life Volume (US$ billions)

Swiss Re maintained its market share lead over all reinsurers in recurring U.S. individual life reinsurance new business volume at U.S.$150 billion (a 3 percent increase over 2022/a 23 percent market share). RGA saw a significant jump in its recurring volume assumed (U.S.$149 billion/a 22 percent market share), while the next three largest reinsurers by market share were Munich Re (U.S.$109 billion/a 16 percent market share), SCOR (U.S.$90 billion/a 14 percent market share) and Gen Re (U.S.$53 billion/an 8 percent market share). Six reinsurers reported increases in recurring new business volumes versus 2022.

Portfolio New Business

For the purposes of this survey, portfolio reinsurance is defined to include in-force blocks of business as well as financial reinsurance transactions. This definition can produce large fluctuations from year to year in reported portfolio new business results. Portfolio new business increased from U.S.$124 billion in 2022 to U.S.$220 billion in 2022. Swiss Re accounted for U.S.$176 billion (80 percent market share) of the 2023 portfolio new business followed by Munich Re at U.S.$37 billion (17 percent market share) and RGA at U.S.$7 billion (3 percent market share).

Figure 3 illustrates the portfolio new business written over the last 10 years, which highlights the volatility of the volume of portfolio new business written in any particular calendar year.

Figure 3

Recurring Retrocession

Following analysis of the 2022 Survey, a decision was made to split the retrocession results into two reporting categories—recurring retrocession and portfolio retrocession. Recurring retrocession volumes are considerably smaller than recurring new business and portfolio new business volumes. From 2005 to 2015, overall retrocession production in the U.S. had been on a downswing, dropping from U.S.$43 billion in 2005 to U.S.$5 billion in 2015. 2023 recurring retrocession volume was just over U.S.$4 billion, up from the U.S.$3 billion of volume reported in 2022. The primary recurring retrocessionaires in the U.S. market include Berkshire Hathaway Group and Equitable.

Portfolio Retrocession

The 2022 Survey included reporting of a significant portfolio retrocession transaction that was atypical of recent retrocession market activity, both in the nature of the transaction and the volume of business written. As a result of this transaction, portfolio retrocession market activity is now reported separately. 2023 portfolio retrocession volume was reported at U.S.$3 billion, down from the reported volume of U.S.$573 billion in 2022. The only reinsurer active in the 2023 portfolio retrocession market was Pacific Life Re.