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Life applications in 2016: Great 1st half slightly outweighs declines in 2nd half

Insurance Forums Staff

Application activity for individually underwritten life insurance was mixed in 2016 with the MIB Life Index showing continued expansion, up +1.3% YTD.

Positive year-end results for the composite Index, released last week, were attributable to strength in 2016’s first two quarters — Q1 and Q2 up +5.4% and +1.5%, respectively, compared to the prior year. Second-half activity saw declines in four out of the last six months (Q3 off -0.6% and Q4 off -1.2%).

Fourth quarter downturns in October (-0.9%) and November (-3.3%) showed some signs of easing heading into 2017 with a December uptick of +0.3%. Additional support is seen in the month-to-month activity with December/November 2016/2015 off -4.7% — less than two-thirds of the decline from seasonal norms. Last year was a record-setting year as the gains in Q1 & Q2 marked the seventh and eighth consecutive quarters of growth — the Index’s longest period of expansion on record. The December 2016 closing Index value of 82.38 puts the industry comparatively on par with where it stood at the close of 2008 (82.25) and again in 2012 (82.44).

2016 Application Activity by Quarter

Q1: +5.4%

Q2: +1.5%

Q3: -0.6%

Q4: -1.2%

Overall 2016: +1.3%

Erosion in younger age applications during the year resulted in the 0-44 and age 60+ demographic groups closing 2016 with equivalent growth rates. Looking across the year, every age group posted significant Q1 increases: ages 0-44 lost ground in the final two quarters, ages 45-59 lost ground in the remaining three quarters and ages 60+ stayed positive across all four quarters.

Application activity by age group showed ages 0-44 up +0.8% in December, down -1.5% in Q4 and finished up +1.8% YTD. Ages 45-59 were down -1.3% in December, down -1.8% in Q4 and finished flat -0.1% YTD. Ages 60+ were up +1.5% in December, up +0.9% in Q4 and finished up +1.8% YTD. See the MIB Life Index Annual Report for a complete analysis of 2016.

“Over the past few years we’ve seen the industry achieve solid growth in reaching younger age applicants, reflecting ongoing investments in marketing and product strategies that target this demographic,” said Lee Oliphant, MIB Group’s Chief Executive Officer. “We remain cautiously optimistic that December’s uptick and traditional strength observed in past January’s will put the industry back on-track for a healthy 2017 performance.”

Download the 2016 MIB Life Index Annual Report at no charge by registering at the Enhanced Life Index Portal: www.mibsolutions.com/regLI. MIB’s “2016 Year-in-Review” video is anticipated in February.

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, the Index is based on the number of searches MIB life member company underwriters perform on the MIB Checking Service database. Since the vast majority of individually underwritten life premium dollars 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.

About MIB: MIB is the life and health insurance industry’s most trusted and secure resource for data-driven risk management services that protect the financial integrity of its members and address their evolving needs. Owned by its members, MIB is uniquely positioned to securely collect and analyze confidential data. MIB services help to detect fraud, errors and omissions on insurance applications; to analyze industry data needed to manage a variety of financial risks; and to make regulatory reporting compliance less onerous and more efficient. As the life insurance industry’s first statistical agent, our MIB Solutions, Inc. subsidiary cost-effectively performs annual data calls for those insurers subject to principles-based reserving. MIB Group, Inc., a membership corporation, provides services through its wholly owned operating subsidiaries, MIB, Inc. and MIB Solutions, Inc. For more information, visit www.mibgroup.com.



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