Variable life insurance sales with single premiums included at 10% for the 40 companies reporting in the VALUE survey for the second quarter of 2006 were $599.4 million, a 2.2% increase over first quarter 2006, but a 0.2% decrease from 2nd quarter 2005 sales, which were $600 million.
Year-to-date first quarter 2006 sales are 0.6% lower than year-to-date second quarter 2005 sales.
(Sales include first-year annualized premium, drop-in premiums and 10% of single premiums.)
The market estimate for the first 6 months of 2006 with single premiums included at 10% is $1.265 billion, down from $1.3 billion for the comparable period the previous year.
Variable life sales with single premiums included at 100% for the 40 companies in the VALUE survey for the second quarter of 2006 were $609 million, a 2.2% increase over first quarter 2006, which had sales of $596 million, but a 0.6% decrease from second quarter 2005 sales, which were $613 million.
The market estimate for 2005 with single premiums included at 100% is $1.31 billion.
For the first 6 months of 2006, the top 5 companies/fleets–IDS, Hartford Life, John Hancock, Lincoln National and Pacific Life–captured 49% of all VL sales (including single premiums at 10%), while the top 10 companies/fleets garnered 75% of VL sales.
For the second quarter, Lincoln National ranks among the top 5 companies, displacing MetLife, which now ranks 8th. It should be noted that Lincoln National now includes Jefferson-Pilot.
For the companies in the survey, the number of flexible-premium contracts issued during the first 6 months of 2006 decreased 12% from the number issued during the comparable period in 2005. The average face amount increased 7% to $373,043.
The single-premium VL market continues to suffer. The total premium for single-premium products for the 6 companies in the VALUE survey for the first 6 months of 2006 was $15.7 million, compared to $20 million for the same period the year before.
The number of single-premium contracts issued during the first 6 months of 2006 was 10% lower than the number issued during the first half of 2005. The average face amount decreased 19% to $112,323, while the average premium decreased 13% to $50,160.
The total premium for second-to-die products issued during the first 6 months of 2006 for the companies in the survey was $128 million, compared to $118 million during the same period the year before.
The number of second-to-die contracts (including single-premium and flexible-premium products) issued during the first half of 2006 fell 15% from the first half of 2005. The average face amount increased 19% to $2,403,019.
For the companies reporting sales by distribution channel for the first 6 months of 2006, career agents and independent broker-dealer firms dominated flexible-premium variable life sales, capturing 53% and 33% of the market, respectively.
Career agents dominated single-premium VL sales during the same period, capturing 65% of the market. Regional firms and independent broker-dealer firms garnered 18% and 14% of the market, respectively, while banks had 3%.
As of June 30, 2006, total variable life assets for the companies reporting in VALUE were $113 billion, up 8% from $103.5 billion on June 30, 2005. Of the total assets reported, 92% were held in a separate account.
VALUE classes funds into the following categories: growth, aggressive growth, growth and income, international stock, government bond, corporate bond, high-yield bond, international bond, money market, balanced and specialty (e.g., gold, real estate).
As of June 30, 2006, approximately 77% of the variable life separate account assets were in stock funds; 9%, bond funds; 4%, money market funds; 7%, balanced funds; and 2%, specialty funds.
Fixed account interest rates on VL policies showed a slight increase. The average 1-year interest rate on June 30, 2006, was 4.19%, up from 4.16% on March 31, 2006. The average renewal rate on June 30, 2005, was 4.23%, up from 4.20% on March 31, 2006.
Also included with this report on second quarter VL sales is a chart showing sales in the first quarter of 2006.