NU Online News Service, Sept. 16, 2003, 5:59 p.m. EDT – U.S. individual life sales revenue was 5% lower during the second quarter than it was during the second quarter of 2002, according to industry survey results released by LIMRA International, Windsor, Conn.
The number of policies sold fell 6%, and the face amount of the coverage sold fell 6%, LIMRA says.
LIMRA is blaming the drop on a continuing slump in sales of life products that give consumers a chance to tie policy returns to stock prices.
Sales of whole life increased 9%, and sales of universal life climbed 26%. But variable life premiums were down 56%, and variable-universal life premiums were down 41%, LIMRA says. Because of the shift in demand to UL policies, from VUL policies, UL policies now account for about one-third of premiums from new policy sales.
“Variable life market share has tracked closely with trends in the stock market, with about a quarter delay in response to a shift in the market,” Elaine Tumicki, head of LIMRA’s product research unit, says in a statement about the second quarter results.
U.S. stock prices have been rising in recent months, but, “given the length of the recent bear market, it is difficult to predict how soon variable life sales will recover,” Tumicki says.
Although LIMRA is reporting lower second quarter sales figures, the LIMRA results are painting a somewhat brighter picture than the MIB Group Inc., Westwood, Mass., has been painting with its monthly life application activity statistics.
MIB is a nonprofit group that collects information about individual life insurance customers for most U.S. and Canadian life and health insurance companies. The group comes up with its application activity statistics by analyzing the search activity statistics for its own databases.
The MIB application activity level was down 6% from the comparable 2002 activity level for the first quarter and down 8% for the second quarter.