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Dismal GUL sales drag 1Q U.S. individual life premium to 7% decline

Brian Anderson

Total individual life insurance new annualized premium fell 7% in the first quarter 2014, according to LIMRA’s Retail Individual Life Insurance Sales Report.

Policy count declined 4% for the quarter.

“The decline is being driven by the drop in universal life sales – particularly guaranteed universal life, which fell 48%,” said Benjamin Baldwin, associate analyst, LIMRA Insurance Research. “Responding to new reserving requirements implemented in 2013, we saw companies re-pricing or adjusting features on their guaranteed universal life products.  If you took guaranteed universal life out of the equation, total individual life premium would actually increase just under 1%.”

Total universal life (UL) new annualized premium dropped 15% in the first quarter 2014. Policy count fell 9%. UL market share represents 38% of total life insurance premium.

Indexed UL (IUL) new annualized premium improved 15% in the first quarter 2014. LIMRA attributes the increase to several new entrants in the market, as well as strong growth reported by 9 of the top 10 IUL writers. IUL now represents 39% of UL sales and holds 14% market share of total individual life premium. In comparison, IUL market share was only 8% in 2007.

Variable universal life (VUL) recorded strong growth in the first quarter 2014. VUL new annualized premium and policy count each increased 20%. Half of the top 10 writers reported increases. This is the sixth consecutive quarter of positive growth for VUL. VUL market share represents 6% of total individual life insurance premium.

After 18 consecutive quarters of positive growth, whole life new annualized premium declined 3% in the first quarter 2014.  Policy count was also down 4%.  WL premium represents 32% of the total individual life market for the quarter.

Term life insurance new annualized premium fell 4% in the first quarter 2014. Two thirds of term writers reported negative growth for the quarter compared to prior year.  It is important to note that term experienced significant growth in 2013, due to several companies reintroducing traditional term products replacing their term UL products.  Term’s market share was 23% in the first quarter.

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



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