AD&D Insurance in the US Industry Market Research Report Now Available from IBISWorld

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The Accidental Death and Dismemberment (AD&D) Insurance industry suffered during the recession as employment rates dropped and per capita disposable income decreased. As companies closed or laid off workers, there was less opportunity for Americans to purchase AD&D insurance plans. However, as the economy recovers, more businesses will open, providing the US with more employment opportunities, thus increasing the need for AD&D insurance. As industry profit margins increase, companies will try to expand into emerging economies where accidental death and dismemberment are more frequent. Despite a positive outlook, as more women enter the workforce, households will have less financial vulnerability, which will prove a challenge for the industry. For these reasons, industry research firm IBISWorld has added a report on the AD&D Insurance in the US industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

A return to growth will be bolstered by rising employment levels and overseas expansion

The Accidental Death and Dismemberment (AD&D) Insurance industry provides added peace of mind and financial security to insured persons looking to protect policy beneficiaries from financial losses that may result if the policy holder accidentally dies or suffers dismemberment. These policies are primarily sold by the life insurance industry (IBISWorld report 52411a) as supplementary coverage packaged with traditional life insurance policies.

Over the five years to 2012, IBISWorld estimates that revenue from AD&D insurance declined at a 2.8% average annual rate, including a projected decline of 0.7% in 2012 to total $24.9 billion. The Great Recession decimated consumer disposable income, which caused industry revenue to fall 7.8% in 2009 and a further 5.7% in 2010. According to IBISWorld industry analyst Doug Kelly, struggling companies were forced slash employee benefits, including their offerings of AD&D insurance, while individuals discontinued their existing policies to reduce costs.

Long-term demographic and secular trends, such as a shift toward services occupations and declining mortality rates, birth rates and household formation have also reduced consumer demand for survivor benefits provided by AD&D insurance. Americans are increasingly less likely to suffer from accidental death and dismemberment in the workplace or have financial dependents. These trends are projected to continue through the outlook period, further reducing consumer demand for AD&D insurance.

Over the next five years, IBISWorld projects industry revenue will return to marginal growth. This will be due to rebounds in employment and rising consumer disposable income that will increase the likelihood consumers choose to purchase life insurance and added AD&D coverage. In response, life insurers that provide AD&D insurance are projected to consolidate and expand into overseas markets to attempt to grow revenues and maintain profitability over the outlook period. “The US AD&D Insurance industry has low market share concentration, as the top four AD&D insurers in the United States account for less than 30.0% of industry revenue in 2012,” said Kelly. Over the five years to 2017, concentration is expected to increase as larger firms acquire smaller operators in an attempt to increase market share and expand services.

The four main types of insurers in the United States include stock-owned entities, mutual companies, fraternal organizations and federal agencies. However, most insurers are organized as either stock or mutual companies. Stock insurers issue stock and are owned by their stockholders, while mutual companies are legally owned by their policyholders and consequently do not issue stock. Stock insurance companies can be owned by a variety of investors, including individual investors, institutions, corporations, other insurance companies and even mutual firms. As a result, these entities tend to be less risk-averse in comparison to mutual companies, as the diverse ownership base is generally more concerned with profit margins and stock appreciation than financial stability. For more information, visit IBISWorld’s AD&D Insurance in the US industry report page.

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IBISWorld industry Report Key Topics

This industry underwrites (i.e. assuming the risk and assigning premiums) accidental death and dismemberment insurance policies. AD&D policies pay out money to a beneficiary upon the accidental death of the policyholder. AD&D policies also pay out to the policyholder directly in the case of accidents that cause a loss of limb or sight.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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