Life Premium Jumps 15% In 4Q — Thank CSO Table

Courtesy of LIMRA

Total U.S. individual life insurance new annualized premium jumped 15% in the fourth quarter, compared with prior year results, according to the LIMRA U.S. Retail Individual Life Insurance Sales Survey.

For the year, total individual life insurance new annualized premium increased 5%, compared with 2018 results. The number of policies sold fell 2% in the fourth quarter and dropped 3% for the year.

“Because all life insurance products were required to shift to the 2017 Commissioners Standard Ordinary (CSO) mortality table by December 31, many companies reported increased sales of products using the 2001 standard,” noted Ashley Durham, associate research director, LIMRA Insurance Research. “All major product lines recorded growth in the fourth quarter with more than half of U.S. life insurance manufacturers, including nine of the top 10, reporting positive results.”

The CSO mortality tables are a standard for measuring average life expectancy across various demographics for the purpose of calculating life insurance reserves. Advancements in medicine, technology, lifestyle trends and more are continually impacting mortality rates, making periodic updates to the CSO table essential.

UL Premium Up

Overall total universal life (UL) new premium increased 31% in the fourth quarter, primarily driven by indexed universal life (IUL) sales. Seven of the top 10 UL writers reported positive growth in the fourth quarter. For the year, UL new premium increased 9%.

For the 13th consecutive quarter, indexed universal life new premium had positive growth, increasing 33% in the fourth quarter and 14% for the year. Eight of the top 10 IUL writers reported positive growth. Once again, IUL products experienced the largest absolute dollar increase for the quarter and for the year.

Lifetime Guarantee Universal Life new premium improved for the first time after 10 quarters of declines. LTG UL new annualized premium jumped by more than 20% in the fourth quarter, ending the year down 5%. Seven of the top 10 writers reported growth in the fourth quarter.

Total UL held a 38% market share of the total life insurance market in 2019.

VUL new premium increased 18% in the fourth quarter, year-over-year. This is the 9th consecutive quarter of increases, compared to prior year results. Nine of the top 10 VUL writers reported increases in new premium in the fourth quarter.

For the year, VUL grew 11%, compared with prior year results. VUL represented 8% of the total life insurance market in 2019.

Whole life new premium increased 3% in the fourth quarter. In 2019, whole life new premium growth increased 1%. Just three of the top 10 whole life writers reported increases in the fourth quarter. Whole life new premium represented 33% of the total life market.

Term new premium increased 4% in the fourth quarter, resulting in a 3% increase for the year. Just over half of the term carriers reported increases in premium (compared with fourth quarter 2018) including the majority of the top 10. Term new premium represented 21% of the U.S. life insurance market in 2019.

LIMRA’s Fourth Quarter 2019 U.S. Individual Life Insurance Sales Survey represents approximately 80% of the U.S. individual life insurance annualized premium market.