Promises Kept for American Families, Economy

Nov 13, 2020

When a customer purchases a life insurance policy, the life insurer vows that it will honor its commitment to the policyholder and pay the beneficiary of the policy. 

That payment could happen next month. 

Or next year. 

Or even next century.

It doesn’t matter. Just as they’ve done for more than 175 years, America’s life insurers are going to keep the promises they make to their customers.

How can life insurers make promises that might not come due until the 22nd century? By focusing on stable long-term investments that can support their promises to guarantee policyholder claim payments. 

These investments, in turn, provide a stable source of investment capital for the nation’s credit markets.   As noted in a recent study from MetLife and the Brattle Group, life insurers had more than $8.6 trillion of capital invested in the economy as of 2019. 

And most of these investments were for the long-term. According to the MetLife/Brattle study, in 2018 (the most recent year with available data), 95 percent of life insurers’ bond investments had maturities greater than five years at the time of purchase, and 72 percent had maturities of 10 years or more. By comparison, only 27 percent of commercial bank financial assets in 2019 had a maturity greater than five years.

These long-term investments are essential to meet the guarantees made to policyholders and they deliver indispensable capital that enhances growth, provides jobs and supports families in communities across the United States.

Now more than ever, the stable long-term capital that life insurers provide is essential for our nation’s prosperity. And the financial peace-of-mind that life insurers provide to American families has never been more important than during the coronavirus pandemic.

Life insurers keep their promises. And our promises deliver vital resources to American families and the American economy. 

The MetLife/Brattle study said it best: “Life insurance is an important component of the U.S. economy. It plays a unique role not only in the safety and security it provides to individuals, but in the stability and liquidity it provides to the financial markets and the overall economy.”

Susan K. Neely

Susan K. Neely is the President and CEO of the American Council of Life Insurers (ACLI), the nation’s leading trade association determined to help families live better lives by achieving financial security and certainty. As president and CEO, Neely drives public policy and advocacy on behalf of ACLI’s member companies that represent 94 percent of industry assets and serve 90 million families.