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September 22, 2002 at 08:00 PM
2nd Quarter Variable Life Sales Slid 27% From Last Years 2nd Quarter
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Variable life sales continue to slide. VL sales with single premiums included at 10% for the 53 companies reporting in Tillinghasts VALUE survey for the second quarter of 2002 were almost $1.09 billion, with year-to-date sales at $2.22 billion. This is a 27% decrease from the second quarter of 2001 and a 4.5% decrease from the first quarter of 2002, which had sales of $1.136 billion.
(Sales include first-year annualized premium, drop-in premiums and single premiums.)
The market estimate for the first six months of 2002 with single premiums included at 10% is $2.25 billion.
The decrease in variable life sales can be attributed to the volatile and depressed equity markets shifting sales to fixed products, the estate tax law changes and the lagging economy.
Variable life sales with single premiums included at 100% for the 53 companies in the VALUE survey for the second quarter of 2002 were $1.13 billion. This is a 27% decrease from the second quarter of 2001 and a 4% decrease from the first quarter of 2002.
The market estimate for the first six months of 2002 with single premiums included at 100% is $2.38 billion.
For 2002, the top five companies/fleets–MetLife/NEF/GenAm/COVA, Hartford Life, Pacific Life, IDS Life, and Equitable–captured 33% of all variable life sales (including single premiums at 10%), while the top 10 companies/fleets garnered 56% of all sales.
For the first six months of 2002, Met Life reported the highest annual premiums ($105.1 million). Pacific Life had the second highest with $98.3 million in annual premium sales, although it ranked third based on total sales (including single premiums at 10%).
For the companies reporting in the survey, the number of flexible premium contracts issued during the first six months of 2002 decreased 23% from the number issued during the first half of 2001. The average face amount increased 7% to $296,263, while the percentage of premium allocated to the general account increased to 4%.
The total premium for the 13 companies participating in VALUE with 14 single premium products for the first six months of 2002 was $70.5 million, compared to $87.9 million for the first half of 2001.
