U.S. life insurance premiums rose 1% in 2017 while policy count declines 3%

Total U.S. individual life insurance new annualized premium (premium) eked out a 1% increase in 2017 compared with 2016 results, according to the LIMRA U.S. Retail Individual Life Insurance Sales Survey, released March 12. This represents the fourth year of growth in premium for U.S. life insurance.

The study found fourth quarter 2017 new premium – driven by declines in universal life and whole life – dropped 1%, compared with prior year.

“Most detrimental to growth in the fourth quarter was a 20% drop in fixed universal life insurance sales,” said Ashley Durham, assistant research director, LIMRA Insurance Research. “In fact, non-indexed universal life insurance annualized premium sales fell by more than $100 million in the final quarter of 2017.”

Policy count fell 1% in the fourth quarter, and was down 3% overall for 2017.

In the fourth quarter, whole life (WL) new premium fell 4%, despite nearly 6 in 10 carriers reporting positive growth. For the year, WL new premium was flat. The last time WL did not see positive growth for the year was in 2005. WL represented 35% of the total U.S. life insurance market in 2017.

Total universal life premium dropped 4% in the fourth quarter, but remained 1% higher than 2016 sales results.

Indexed UL (IUL) rose 9% in the fourth quarter, experiencing the largest growth in absolute dollars. More than half of the writers reported positive growth. For the year, IUL improved 8%. IUL represented 59% of UL premium and 22% of all individual life premium. That’s the highest level since LIMRA began collecting IUL (in 2006).

Lifetime guarantee (LTG) UL new premium fell 27% in the fourth quarter, which represents the third consecutive quarter of declines. Much of this decline can be attributed to increased rates by some carriers (because of interest rates and the implementation of principal based reserves). In 2017, LTG UL dropped 12%, compared with prior year. LTG UL held 19% of the UL market and 7% of the total U.S. individual life insurance market in 2017.

Total UL represented 38% of the U.S. life insurance market in 2017.

Variable life UL (VUL) new premium increased 17% in the fourth quarter. For the year, VUL new premium grew 2%. Its market share of the total U.S. individual market was 6% in 2017, level with prior year.

Term new premium rose slightly in the fourth quarter, up 1%. Over half (53%) of the carriers reported positive growth. For the year, term improved 2%, compared with prior year. Term held a 21% market share of the total life insurance market in 2017.

LIMRA’s Fourth Quarter 2017 U.S. Individual Life Insurance Sales Survey represents approximately 80% of the U.S. individual life insurance annualized premium market.

View the latest data table on U.S. life insurance sales trends. For more statistics, visit LIMRA’s Data Bank.

U.S. life insurance application activity losses slow in February

Early year declines in U.S. life insurance application activity continued in February, according to the latest MIB Life Index, released on March 6.

But the decline in February wasn’t as bad as January, when application activity was down 4.4% compared to January 2017. Feb. 2018 life insurance application activity was down 2.4%, year-over-year.

Looking back, after two years of very solid gains in 2015 and 2016, the composite Life Index started weakening in Q3 2016 and has yet to show a firm correction from the downturn. For the year, the MIB Life Index is off -3.5% YTD. February’s activity was up 4.1% from that of January.

U.S. life insurance application activity was off across all age groups with the younger ages a bit more resilient to the downturn. Application activity ages 0-44 were off -1.8%, activity ages 45-59 were off -3.5%, and activity ages 60+ were off -2.7%. The 0-44 age group led in 2017, gaining ground in the year’s final two quarters up 0.2% and 1.6%, respectively and finishing the year just below par, off -0.7%YTD.

About the MIB Life Index: The MIB Life Index is the life insurance industry’s timeliest measure of application activity in the United States. Released to the media each month by the Braintree, Mass.-based MIB Groub, the Index is based on the number of searches MIB life member company underwriters perform on the MIB Checking Service database. Since over 90% of life insurance applications in North America include an MIB search, as a routine underwriting requirement, the MIB Life Index provides a reasonable means to estimate new business activity. For past releases, methodology or to subscribe visit www.mib.com/lifeindex.