According to Plunkett Research, life insurance in the United States was a $517 billion business (in gross premiums) in 2005, while life and health insurers earned about $34 billion in net investment income in that year.

Analysts expect $40 billion-plus storms to become more common, and many within the industry expect a $100 billion CAT year in the not too distant future. Pricing and underwriting discipline also remain a key issue. The III notes that regulators, especially in catastrophe-prone areas, are reluctant to allow insurers to charge risk-based rates. Most insurers are also paying more for reinsurance, which causes them to report lower “net” written premium growth figures if they cannot fully recoup those costs at the retail level.

The 2007 Groundhog Survey, carried out by the Insurance Information Institute, suggested that due to relatively low catastrophe losses in 2006 and a strong performance in virtually all other major lines of property/casualty (P/C) insurance, the industry should achieve its best underwriting performance since 1936. Surveyed analysts expected the industry’s profitability to continue in 2007, although with a much smaller underwriting profit, and the trend of decreasing underwriting profits was expected to continue in 2008.