U.S. life insurance application activity fell 2.4 percent in February compared to the year-ago period, but declines for buyers under 45 years old were less severe than for older buyers, new data shows.
That might be a sign that distribution investments to reach younger buyers is paying off.
“It’s very much a pattern,” said David Aronson, director of marketing and corporate communications for MIB Group. “In good times they grow more than any other age group and when the market is down they lose less.”
Life insurance applications in February 2018 among the 0-44 age group dropped 1.8 percent compared to the year-ago period, activity among the 45-59 age group dropped 3.5 percent and for those 60 and older activity fell 2.7 percent, the index found.
While February activity fell 2.4 percent compared to the year-ago period, it was improved from the 4.4 percent drop experienced in January compared to January 2017, MIB reported.
The MIB Life Index measures life insurance application activity in the U.S.
Potential buyers in the 0-44 age group are also beginning to raise families and buy houses so higher rates of application activity can be expected, Aronson said.
“In February, all the age groups were off,” Aronson said.
“The under 45s is down less and more resilient compared to other age groups,” he said. “Those (under 45s) are the up and comers, that’s the millennials and the Generation X market having kids and buying homes.”
Insurers, conscious of the demands of younger buyers, have made significant investments improving their distribution channels, automating underwriting systems and slashing turnaround times for policy applications, he said.
The latest life index data reveals that what’s happening with life applications for the 0-44 demographic is the life insurance sales story, Aronson said.
A new generation of buyers is leaving the kitchen table sale behind and prefers buying through digital channels, which insurers continue to aggressively address, Aronson said.
“In many ways this adaptation to the marketplace is a success story for the industry,” he said.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected]
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