Variable life insurance sales with single premiums included at 10% for the 38 companies reporting in the VALUE survey for the 4th quarter of 2007 were $802.7 million, a 12.1% increase from 3rd quarter 2007 sales of $716 million, exhibiting the typical seasonality trends of life insurance sales.
This is a 21.6% increase over 4th quarter 2006 sales, which were $660 million.
Full-year 2007 sales at $2.864 billion were 19.2% higher than full-year 2006 sales of $2.403 billion.
(Sales include first-year annualized premium, drop-in premiums and 10% of single premiums.)
The market estimate for 2007 with single premiums included at 10% is $3.07 billion, up from $2.585 billion the previous year.
Variable life sales with single premiums included at 100% for the 38 companies in the VALUE survey for the 4th quarter of 2007 were $812.7 million, an 11.8% increase from 3rd quarter 2007, which had sales of $727 million, and a 20.4% increase from 4th quarter 2006 sales, which were $675 million.
Full-year 2007 sales with single premiums included at 100% were $2.905 billion, up from $2.444 billion in 2005.
The market estimate for the full-year 2007 with single premiums included at 100% is $3.105 billion, up from $2.63 billion the year before.
For 2007, the top 5 companies/fleets–John Hancock, Hartford Life, Pacific Life, Riversource and AXA Financial/MONY–captured 54% of all variable life sales (including single premiums at 10%), while the top 10 companies/fleets garnered 78% of VL sales.
For the 4th quarter of 2007, AXA Financial/MONY ranked among the top 5 companies, displacing Lincoln National, which now ranks 6th.
For the companies in the survey, the number of flexible-premium contracts issued during 2007 decreased 6% from the number issued during 2006. The average face amount increased 5% to $397,553.
The total premium for single-premium products for the 6 companies in the VALUE survey for 2007 was $29.3 million, relatively stable when compared to 2006.
The number of single-premium contracts issued during 2007 was 14% lower than the number issued during 2006. The average face amount increased 3% to $130,015, while the average premium increased 14% to $60,915.
The total premium for second-to-die products issued during 2007 for the companies in the survey was $388 million, compared to $240 million during 2006.
The number of second-to-die contracts (including single-premium and flexible-premium products) issued during 2007 increased 26% over 2006, while the average face amount increased 11% to $2,463,159.
For the companies reporting sales by distribution channel for 2007, career agents and independent broker-dealer firms dominated flexible-premium variable life sales, capturing 47% and 35% of the market, respectively.
Independent broker-dealer firms and career agents also dominated second-to-die variable life sales, capturing 37% and 36% of the market, respectively.
As of Dec. 31, 2007, total variable life assets for the companies reporting in VALUE were $125.8 billion, up 1% from $124.1 billion on Dec. 31, 2006. 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 Dec. 31, 2007, approximately 81% of the variable life separate account assets were in stock funds; 8%, bond funds; 3%, money market funds; 6%, balanced funds; and 2%, specialty funds.
Fixed account interest rates on VL policies remained relatively stable. The average 1-year interest rate on Dec. 31, 2007 was 4.25%, down slightly from 4.27% on Sept. 30, 2007. The average renewal rate was 4.27% on Dec. 31, 2006, a slight decrease from 4.28% on Sept. 30, 2007.
Leah Wolf is with Towers Perrin, of which Tillinghast is a business. She can be reached at .