LIMRA: U.S. Life Insurance Policy Sales Increased 4% in First Quarter 2023, Driven by Small and Mid-Size Carriers

WINDSOR, Connecticut, June 8 (TNSres) -- LIMRA issued the following news release on June 7, 2023:

Total U.S. retail life insurance new annualized premium fell 7% in the first quarter 2023 to $3.75 billion, yet the number of policies sold increased 4% from the prior year. This represents the highest policy sales growth since the second quarter 2021, during the height of the pandemic sales surge.

"Sixty-one percent of the total policy growth was from whole life and term sales and driven primarily by small to mid-sized companies," said John Carroll, senior vice president, LIMRA and LOMA. "Last year's premium was elevated due to changes to IRS tax code 7702, this year we are seeing premium growth normalize. It is encouraging to see an increase in policies sold with smaller face amount, possibly signaling continued interest from middle-market consumers."

Whole life (WL) new annualized premium totaled $1.53 billion in the first quarter, down 4% from prior year but 9% higher than the first quarter 2021. First quarter WL policy count increased 6% year-over year. Although half of WL carriers reported a decline in the number of policies sold, a few mid-size and small carriers, focused on guaranteed issue and smaller face amounts, propelled the overall growth in WL policy sales.

Term life insurance was the only product line to experience growth in both premium and policy sales. In the first quarter, new annualized term premium and policy count both increased 1%, compared with first quarter 2022 results.

Following a 40% jump in the first quarter of 2022 (driven by IRS tax code 7702), indexed universal life (IUL) new premium dropped 16% to $833 million. The results are, however, 16% higher than the first quarter 2021. IUL policy sales jumped a remarkable 25% in the first quarter of 2023.

"Similar to what we saw in 2015 ahead of the Actuarial Guideline 49 (AG-49) model implementation, there was a surge of smaller IUL policies sold in the first quarter in anticipation of the updated NAIC model (AG-49B) changes that went into effect on May 1," said Karen Terry, assistant vice president, LIMRA Insurance Product Research. "We likely see some residual positive impact on IUL policy sales in the second quarter as April's results were 17% higher than prior year."

Variable universal life (VUL) new annualized premium fell 4% to $421 million in the first quarter 2023 but remains more than 40% higher than sales reported in the first quarter 2021. VUL policy sales declined 17% in the first quarter year-over-year. Higher interest rates and increased equity market volatility have made VUL products less attractive to consumers.

Fixed universal life product sales continue to struggle. For the fourth consecutive quarter, fixed UL new premium experienced double-digit declines. Fixed UL fell 16% in the first quarter to $238 million. Policy sales also dropped, down 13% from the first quarter 2022.

For more details on the sales results, go to First Quarter 2023 U.S. Life Insurance Industry Estimates (https://www.limra.com/siteassets/newsroom/fact-tank/sales-data/2023/q1/1q-2023-life-sales.pdf) in LIMRA's Fact Tank (https://www.limra.com/en/newsroom/fact-tank/).

LIMRA's Retail Individual Life Insurance Sales Survey represents 83% of the U.S. life insurance market. Since 1921, the U.S. life insurance industry has relied on LIMRA's benchmark sales study for accurate data and trending insights.

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Original text here: https://www.limra.com/en/newsroom/news-releases/2023/limra-u.s.-life-insurance-policy-sales-increased-4-in-first-quarter-2023-driven-by-small-and-mid-size-carriers/