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Individual life annualized premium increases 5% in 1Q, all lines but VUL see growth

Insurance Forums Staff

Individual life insurance new annualized premium increased 5% in first quarter 2017 compared to first quarter 2016, according to LIMRA’s First Quarter 2017 U.S. Individual Life Insurance Sales Survey, released June 6.

Nearly 60% of companies participating in the survey reported increased sales, including nine of the top 10 carriers.

“U.S. individual life insurance premium sales increased all but one year since the Great Recession in 2009, and 2017 has started off solid with growth across every product line except for variable universal life,” said Ashley Durham, associate research director, LIMRA Insurance Research. “LIMRA expects growth to remain positive throughout the year, with whole life and universal life continuing to drive results.”

The total number of policies sold in the first quarter decreased 2%, compared with the same quarter of the prior year.

Universal life (UL) new annualized premium increased 6% in the quarter. Both indexed UL and lifetime guarantee UL (LTGUL) premium grew, compared to prior year.

Indexed universal life (IUL) new annualized premium increased 5% in the quarter after a sluggish year because of AG49, (a regulation designed to make the illustrations more consistent). Before the implementation of regulation AG49, IUL sales grew by double digits, on average more than 25% annually since 2007. IUL now represents 56% of UL and 21% of all individual life premium.

Continuing the growth seen in the fourth quarter 2016, LTGUL new annualized premiums rose 14%, compared with first quarter 2016 results. LTGUL represents 21% of total UL sales and 8% of total life premiums for the year.

Total UL premium represented 37% of all life insurance premium sold in the first quarter 2017.

Variable universal life (VUL) new annualized premium fell 3% in the first quarter. While this is better than the double-digit declines seen in 2016, this is a stark change from the early 2000s. VUL’s market share dropped to 5% of total life sales in the first quarter.

Whole life (WL) products continue to enjoy positive growth. In the first quarter, WL new annualized premium grew 7%, with eight of the top 10 companies reporting growth. WL premium has increased for the past 11 years and represents 37% of the total life market.

Term life insurance new premium grew 2% in the first quarter after declining in the fourth quarter of last year. Term’s market share has been relatively flat since 2011 and remains at 21%.

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



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