The Good And Bad In Life Insurance 3Q Numbers

There’s no doubt there was some good news and some bad news in the third-quarter life insurance sales numbers.

How good and how bad depend on the time frame comparison and methodology used. Diving deeper into those things explains why LIMRA and Wink both were correct with last week’s “universal life is up” and “universal life is down” reports, respectively.

First, the numbers:

• Indexed UL new premium climbed 10 percent in the third quarter and 12 percent year-to-date, LIMRA reported. Both figures were year-over-year.
• Non-variable UL was down 11 percent compared to the second quarter and down more than 15.6 percent year-over-year, Wink Inc. reported.

All of these data points are correct, but we need to add some context. Wink tallies “non-variable UL,” which included both indexed and fixed UL. Wink went on to note that its numbers show IUL down 4.6 percent compared with the second quarter, but up 10.5 percent over third-quarter 2017.

A LIMRA spokesman said the organization is sticking with strictly year-over-year comps “because, in our experience, there is a seasonality factor that comes into play. Sales in certain quarters tend to run higher than other quarters.”

IUL premium represented 65 percent of UL premium, and 24 percent of all individual premium for the first three quarters, LIMRA noted.

“Market conditions continue to be favorable for IUL products. IUL premium has increased for the past eight consecutive quarters,” said Ashley Durham, associate research director, LIMRA Insurance Research.

LIMRA also found that fixed UL sales were flat, mainly due to “product discontinuation and rate hikes.”

Fixed UL third-quarter sales were $325 million, down more than 20 percent compared with the second quarter and down 39.1 percent year over year, Wink reported.

Up And Down

Other lines were up and down, LIMRA found:

• Lifetime Guarantee Universal Life declined for the sixth consecutive quarter, down 10 percent in the third quarter. Year-to-date LTGUL fell 16 percent, compared with the prior year. LTGUL represents 17 percent of UL sales and 6 percent of total life premiums.
• Variable universal life new annualized premium increased 29 percent for the quarter and 14 percent year-to-date.
• Whole Life new annualized premium rose 3 percent in the third quarter.
• Term life insurance new premium grew 1 percent in the third quarter and year-to-date.

Overall, U.S. life insurance new annualized premium increased 3 percent in the third quarter, and 1 percent for the year, LIMRA found.

Wink plans to add additional product lines, such as term life, to its report in the coming quarters.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.