2019 Life Reinsurance Survey Results June 2020 2019 Life Reinsurance Survey

Disclaimer

Munich Re prepared this survey on behalf of the Society of Actuaries Reinsurance Section as a service to section members. The contributing companies provide the data in response to the survey. The data is not audited and Munich Re, the Society of Actuaries and the Reinsurance Section take no responsibility for the accuracy of the figures.

Overview

Who: Top U.S. and Canadian reinsurers What: Individual and group new business (assumed) and in force Definitions: Recurring: issued in same year as reinsured Portfolio: issued prior to year reinsured and financial reinsurance Retrocession: reinsurance not directly written by ceding company

Reinsurance figures for individual life are based on amount (NAR) and group life based on premium

Note: Some figures may not add due to rounding

Reinsurance Landscape 2018 2019

U.S. Individual Life (IL) New Business Volumes U.S. Group In Force Premium ($ Billions) ($ Millions) $600 $6,000 $5,612 $521 $535 $500 $5,000 $4,490

$400 $4,000 +25% $300 +3% -10% +7% $3,000 -6%

$200 $2,000 $101 $91 $821 $100 $1,000 $772 $7 $7 $- $- Recurring Portfolio Retrocession Recurring Portfolio

Canada IL New Business Volumes Canada Group In Force Premium ($CA Billions) ($CA Millions) $200 $189 $160 $172 $134 Munich Re $180 $140 $125 portfolio $160 $120 business was $140 $100 reclassified +7% $120 +10% -70% -15% $80 as recurring $100 $60 during 2019 $80 $40 $60 $20 $- $- $40 $19 $- $20 $6 $7 $6 Recurring Portfolio $- 2018 2019 Recurring Portfolio Retrocession

1986 1995 2005 2019

# of 30 25 15 10 Reinsurers

Recurring $156B $268B $844B $535B NB

. . Transamerica . Transamerica Re . RGA Re ($183B) SCOR ($113B) Occidental ($28B) ($41B) . . Scottish Re Swiss Re ($106B) Top . . Lincoln National Lincoln National ($131B) . Munich Re Reinsurers Life ($17B) Life ($34B) . Transamerica Re ($100B) . . General Re ($16B) RGA Re ($24B) ($130B) . RGA Re ($96B)

U.S. Individual Life New Business Trend

Annual Percentage Change in U.S. Recurring New Business (2010 – 2019)1

20.0%

12.3%

10.0% 8.9%

4.5% 2.7%

0.0% -0.5%

-3.4% -3.5% -4.7%

-10.0% -8.7%

-15.3%

-20.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

1 RMA is a new respondent and its figures are included in 2018 and 2019 – RMA represents Korean Re, Toa Re and others and accounts for $14B and $21B of recurring new business in 2018 and 2019 respectively.

U.S. Recurring Cession Rate

U.S. Individual Life Insurance Sales (Face Amount) $2,000 35% 29% 30% 29% 30% $1,800 28% 27% 27% 27% 30% 27% 25% $1,600

$1,400 25%

$1,200 20% $1,000 15% $800 U.S. $ $ (Billions) U.S.

$600 10%

$400 5% $200

$- 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Amt Retained $1,168 $1,211 $1,234 $1,197 $1,168 $1,240 $1,233 $1,222 $1,214 $1,287 Amt Reinsured $505 $461 $445 $443 $422 $407 $457 $498 $521 $535 % Reinsured 30% 28% 27% 27% 27% 25% 27% 29% 30% 29%

Sources: LIMRA and SOA Life Reinsurance Survey

Recurring Business 2019 Market Share ($ billions)

$- $50 $100 $150 Hannover Life Re, 8% SCOR Global Life (US), 21% $115 SCOR Global Life (US) $113

$94 RGA Swiss Re $106 Reinsurance Company, 18%

$93 Munich Re (US) $100

$94 RGA Reinsurance Company $96

$56 Hannover Life Re $43

2018 2019 Munich Re (US), 19% Swiss Re, 20%

U.S. Recurring By Company – Next Five Companies

Recurring Business 2019 Market Share ($ billions)

$- $5 $10 $15 $20 $25 PartnerRe, 2% General Re Life, Optimum Re, 3% $14 2% RMA $21 Canada Life , 4%

$20 Canada Life RMA, 4% $20

$13 General Re Life $16

$14 PartnerRe $11

$9 Optimum Re $9

2018 2019 Top 5, 86%

Top five companies now represent 86% of market share

$1,200

$1,042 $1,000

$800 $729

$628 $600 U.S. $ (billions) U.S. $400 $344

$238 $200 $169 $130 $94 $101 $91

$- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

$250

$203 $200

$150 U.S. $ $ (billions) U.S. $100

$50

$7 $8 $7 $9 $5 $8 $7 $7 $7 $- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

1986 1995 2005 2019 # of 14 14 7 8 Reinsurers Recurring $9B $17B $110B $189B NB

. Munich Re . Munich Re ($3B) . Swiss Re ($4B) . Munich Re ($49B) ($54B) Top . Canadian Re ($2B) . Munich Re ($4B) . RGA Re ($31B) . RGA Re ($46B) Reinsurers . St. Lawrence Re . RGA Re ($3B) . Swiss Re ($26B) . PartnerRe ($1B) ($33B)

Canada Recurring Cession Rate

Canada Recurring Individual Life Volume ($CA Billions)1

$300 80% 70% 70% 58% 70% 65% 68% 70% 64% 61% 61% 62% 60% $200 50%

40%

30% $100 $CA Billions 20%

10%

$- 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Amt Retained $66 $67 $84 $90 $87 $98 $116 $92 $82 $79 Amt Reinsured $153 $153 $149 $143 $142 $153 $160 $168 $172 $189 % Reinsured 70% 70% 64% 61% 62% 61% 58% 65% 68% 70%

1 RMA is a new respondent and its figures are included in 2018 and 2019 – RMA represents Korean Re, Toa Re and others and accounts for $2B and $2B of recurring new business in 2018 and 2019 respectively.

Recurring Business 2019 Market Share ($CA billions)

Hannover Life Optimum Re RMA, 1% Re (Canada), 4% $- $20 $40 $60 (Canada), 7% Munich Re (Canada), 29% $46 Munich Re (Canada) $54 SCOR Global Life $42 (Canada), 9% RGA Re (Canada) $46

$24 PartnerRe $33

Swiss Re $14 $18 Swiss Re , 9% $27 SCOR Global Life (Canada) $17

$12 Optimum Re (Canada) $13

$6 Hannover Life Re (Canada) $7 PartnerRe, 17% RMA $2 $2 RGA Re 2018 2019 (Canada), 24%

Canada Portfolio and Retrocession

Retrocession ($CA Billions)

PartnerRe, 5% AXA Equitable, 1%

Berkshire Hathaway Group (Sun), 14%

RGA Re (Canada), 44%

Pacific Life, 36%

Group Business – Traditional Inforce Premium1

U.S. Inforce Premiums Canada Inforce Premiums ($ millions USD) ($ millions CA)

1,000 160

821 140 134 798 800 777 772 125 728 691 120 105 646 102 103 101 104 104 100 600 546

400 60 U.S. Dollars ($ millions) ($ Dollars U.S. U.S. Dollars ($ millions) ($ Dollars U.S. 40 200 20

- - 2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019 Note: The increase in 2018 is due to a reclassification by Munich Re of their Portfolio business to Recurring 1 Traditional inforce premiums exclude portfolio and retrocession premium

Inforce Premiums 2019 Market Share ($ millions)

All Others, Swiss Re , $- $100 $200 $300 $400 16% 38%

Swiss Re $329 $292

RGA Reinsurance Company $174 $184

Munich Re (US) $212 $177

$32 SCOR Global Life $51

$32 General Re Life $33

Group Reinsurance Plus $34 Munich Re (Hartford) $30 (US), 23%

$7 Hannover Life Re $5

$1 Canada Life $1 RGA Reinsurance Company, 24% 2018 2019

Inforce Premiums 2019 Market Share ($ millions CA)

Optimum Re 0 20 40 60 80 100 (Canada), 2% SCOR Global Life, 2% Munich Re (Canada) $83 Swiss Re , $93 13%

RGA Re (Canada) $19 $19

Swiss Re $17 RGA Re $17 (Canada), 14%

Optimum Re (Canada) $3 $3

SCOR Global Life $3 $3

2018 2019 Munich Re (Canada), 69%

Many Factors Will Influence Future Life Reinsurance Volumes

• Continued trend evolution in Individual Life sales due to COVID-19

• The continued expansion of accelerated underwriting programs

• Emerging needs for insurability of those currently uninsured or underinsured

• Continued aging of the population and changing consumer preferences

• Level of product agility as carriers make investments to address technology burden and develop innovative customer solutions

• Continued regulatory uncertainty as carriers deal with PBR, IFRS17 and GAAP LDTI among other regulatory regimes