Variable life experienced a downturn in sales during the first quarter of 2003 compared to the fourth quarter of 2002. This is consistent with the seasonal trend that life insurance sales typically exhibit. However, sales for the 2003 first quarter were significantly lower than first quarter 2002 sales.
VL sales with single premiums included at 10% for the 51 companies reporting in Tillinghasts VALUE survey for the first quarter of 2003 were $626 million. This is a 24% decrease from fourth quarter 2002, which had sales of $824 million, and a 44% decrease from first quarter 2002, which had sales of $1.119 billion.
(Sales include first-year annualized premium, drop-in premiums and 10% of single premiums.)
The market estimate for the first quarter of 2003 with single premiums included at 10% is $675 million.
Variable life sales with single premiums included at 100% for the 51 companies in the VALUE survey for the fourth quarter of 2002 were $650 million. This is almost a 25% decrease from the fourth quarter of 2002, which had sales of $861 million, and a 44% decrease from first quarter 2002 sales, which were $1.163 billion.
The market estimate for first quarter 2003 with single premiums included at 100% is $700 million.
For 2002, the top five companies/fleets–Pacific Life, Hartford Life, Nationwide, Equitable and IDS–captured 36% of all variable life sales (including single premiums at 10%), while the top 10 companies/fleets garnered 59% of all sales. For the first quarter of 2003, IDS ranked among the top five companies, displacing MetLife.
For the companies reporting in the survey, the number of flexible premium contracts issued during first quarter 2003 decreased 39% from the number issued during first quarter 2002. The average face amount decreased 1% to $299,596, while the percentage of premium allocated to the general account increased to 9%.
The total premium for the 10 companies participating in VALUE with 10 single-premium products for first quarter 2003 was $17.3 million, compared to $32.6 million for first quarter 2002.