Courtesy of LIMRA Reports
In 2019, LIMRA is expecting U.S. individual life insurance sales to rise 3 percent to $15 billion. This growth will be primarily driven by gains in disposable income and bond rates, coupled with low unemployment.
For the past decade, indexed universal life (IUL) has been the success story of the individual insurance market, with annualized premiums increasing each year due to low interest rates and a strong stock market.
While LIMRA still expects IUL growth in 2019, the driving forces of that growth will change. LIMRA expects equity markets to slow, but interest rates will continue to rise.
In regards to technology, LIMRA predicts artificial intelligence (AI) to grow both in the number of companies utilizing it and in its range of applications. While many companies are already using this technology via chatbots and automated underwriting, a large percentage of executives see AI as being extremely important to business in the next three years.
AI is a natural extension of predictive modeling building and companies will look to technology to utilize their vast amount of data and to enhance the existing stills of data scientists.
According to LIMRA, this year will also see an increase in access to workplace retirement savings plans for private sector employees. This will be due to increased interest in multi-employer plans (MEPs) and the rise of FinTech.
Recent federal initiatives, such as President Trump’s executive order to expand the number of small employers who can offer MEPs and the proposed Department of Labor rule expanding MEPs, have also helped pave the way for increased access to workplace retirement savings plans in 2019.
One area LIMRA sees a slowdown in growth is with supplemental benefits. While the growth of overall workplace benefits have been moderate at best, supplemental plans have seen some success in recent years due to the growing popularity of high deductible health plans (HDHPs).
Since HDHPs leave employees open to higher risks and costs many have turned to supplemental plans to help manage those costs and risks such as critical illness coverage, hospital indemnity and accident insurance.
In October, Kaiser Health News suggested the sales of HDHPs have peaked and will now start to trend down. LIMRA believes if that downward trend is to happen and continue, then the sales of supplemental plans will likely follow suit.