Channels, Agents Mix It Up In The UL Sales Wars

With universal life (UL) and indexed universal life (IUL) insurance consistently capturing close to 40 percent of all life insurance sales, it’s no surprise that distribution channels battle incessantly over market share.

The latest field report comes from actuaries Carl Friedrich and Susan Saip at Milliman, who compare the changes in share distribution from calendar year 2015 with the first three quarters of 2016 for different UL lines.

Brokerage, career agent and personal producing general agent (PPGA) channels remain the top channels through which UL products are sold, but agents within those channels don’t relinquish anything without a fight.

Insurers that participated in the Milliman survey reported individual UL sales, measured by the sum of recurring premiums plus 10 percent of single premiums, of $734 million in the first three months of 2016.

In 2015, insurers sold $1 billion worth of UL, the report said.

Survey participants reported IUL sales, measured by the sum of recurring premiums plus 10 percent of single premiums, of $794 million during the first three months of 2016.

In 2015, insurers sold $1.1 billion worth of IUL.

The data comes from 32 insurers that responded to Milliman's October 2016 survey and we condensed the actuaries’ findings below.

Exact percentages of market share changes were not released.

Current Assumption UL

When measured by both premium and face amount, the career agent channel lost market share to the brokerage channel, the actuaries found.

Universal Life with Secondary Guarantees (ULSG)

When measured by premium, the financial institutions channel lost market share primarily to the PPGA channel, the actuaries said.

When measured by face amount, the brokerage channel gained market share, primarily from the career agent and stockbroker channels.

Cash Accumulation UL

When measured by premium, the multi-line exclusive-agent (MLEA) channel gained share at the expense of the career agent channel.

But when measured by face amount, the brokerage channels gained share at the expense of the MLEA channel, the survey revealed.

Accumulation IUL

The brokerage, career agent and personal producing general agent (PPGA) channels were the most popular with accumulation indexed universal life (AccumIUL) products sold over the period, the researchers found.

On a premium basis, PPGA and brokerage channels gained share at the expense of the career agent channel.

On a face amount basis, the PPGA channel gained at the expense of the career agent channel, the actuaries reported.

UL/IUL With Chronic Illness Riders

Brokerage, PPGA and career agent channels are the most popular distribution channels for UL and IUL with chronic illness riders, the Milliman report said.

UL and IUL sales with chronic illness riders is weighted more heavily toward the PPGA channel than the distribution of total UL and IUL sales combined, the report said.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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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 cyril.tuohy@innfeedback.com.