North Dakota Leads U.S. In Life And Annuity Premium Growth

By Cyril Tuohy

InsuranceNewsNet

Advisors looking to grow their life and annuity books of business might want to consider North Dakota. It is the only state to make the top five on two separate lists tracking premium growth over the past four years.

The top states for individual life insurance direct premium growth were Minnesota, North Dakota, Wyoming, Utah and Arkansas. The top states for individual annuity premium growth were Missouri, Montana, Colorado, New Mexico and North Dakota.

Results are contained in a new study, “Individual Life-Annuity State Environment Annual,” by Conning & Co., which surveyed all 50 states and the District of Columbia over the four-year period between 2008 and 2012. Direct premium is the money collected from policyholders before a portion of the funds are deducted by the insurer for pay for reinsurance.

“In this period of uneven economic recovery, understanding the outlook for life insurance and annuity markets at the state level is critical for insurers’ planning purposes,” said Terence Martin, analyst with Conning. “States were affected very differently by the recession and are experiencing significantly disparate rates of recovery.”

Martin, in an interview with InsuranceNewsNet, said the shale oil boom in North Dakota might be one reason for the state’s strong showing on both lists. Young oil industry workers and managers with good incomes are moving into the state, starting families and thinking about life insurance for their families.

“Especially for life, they are in the prime buying ages,” he said.

Minnesota leads the nation in individual life insurance direct premium growth over the four-year period due to the state’s low unemployment, high productivity and relatively high household income, he said. The top five life insurers operating there were Northwestern Mutual, Lincoln National, John Hancock, AIG and Pacific Life.

Missouri leads the nation in individual annuity direct premium growth, even as that state lags near the bottom for individual direct life insurance premium growth, the study also found. The reason why Missouri leads the category isn’t so clear-cut, however, and would require digging “a whole lot deeper” to find out, he said.

In Missouri, Protective Life has a 17 percent annuity market share in that state and the Show-Me State represents more than 25 percent of the company’s individual annuity direct premium “so Protective may have had a push for some reason and that’s moving the needle,” he said. “They are by far the largest seller of annuities in Missouri.”

“Interestingly, in our rankings a given state may have widely different performance for life insurance sales versus annuity sales,” Steve Webersen, director of research at Conning, said in a news release. “Once insurers assess the new state landscape post-recession, they can better position themselves for future growth.”

New York and California remain among the states with the largest overall individual life and annuity premium by virtue of their total population.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].