Strong indexed and variable universal Life sales helped total U.S. individual life insurance new annualized premium to a modest 1% increase in 2018, according to the LIMRA U.S. Retail Individual Life Insurance Sales Survey. This represents the fifth year of growth in premium for U.S. life insurance.
IUL new premium increased 9% in 2018 and 4% in the fourth quarter. For the year, IUL represented 66% of UL premium and 24% of all individual life premium. This exceeds all previous levels of IUL since LIMRA began collecting in 2006.
“Variable universal life (VUL) was the biggest driver of growth in the fourth quarter of 2018,” noted Ashley Durham, assistant research director, LIMRA Insurance Research. “Protection-focused VUL premium represented more than half (53%) of the VUL market in 2018. This is the first time VUL protection-focused products’ market share has exceeded accumulation-focused products’ market share.”
Variable universal life (VUL) new premium increased 15% in the fourth quarter, driven by sales of protection-focused products, which increased 67%. For the year, VUL new premium grew 14%. Its market share of the total US individual market was 7% in 2018, a slight increase compared to prior year.
The study reported that overall life insurance policy count was flat in the fourth quarter and for the year. It marked the third consecutive quarter of flat policy count and the second consecutive year without policy growth.
Whole life (WL) new premium growth was flat in the fourth quarter and in 2018. This is on top of flat sales in 2017 and only the second year without positive annual growth since 2006. Half of the WL writers, including four of the top 10 companies, reported lower sales in 2018. WL represented 35% of the total U.S. life insurance market in 2018.
Universal life premium dropped 3% in the fourth quarter, and was down 1% in 2018, compared to 2017 sales results.
Indexed UL (IUL) new premium rose 4% in the fourth quarter, and increased 9% for the year, compared to 2017 results. IUL was the biggest driver of growth for the year overall. For the year, IUL represented 66 percent of UL premium and 24% of all individual life premium. This exceeds all previous levels of IUL since LIMRA began collecting in 2006.
Lifetime guarantee (LTG) UL new premium fell 20 percent in the fourth quarter, which is the seventh consecutive quarter of declines. Sales among these products continued to be hampered mainly by rate hikes. Full year 2018 results for LTG UL dropped 17%, compared with prior year. LTG UL held 16% of the UL market and 6% of the total US individual life insurance market in 2018.
Total UL premium represented 37% of the U.S. life insurance market in 2017.
Term life insurance new premium rose 2% in the fourth quarter. For the year, term improved 1%, compared with prior year. Term held a 21% market share of the total life insurance market in 2018. Term life insurance market share has been in the 21-22% range since 2011.
LIMRA’s Fourth Quarter 2018 U.S. Individual Life Insurance Sales Survey represents approximately 80% of the U.S. individual life insurance annualized premium market.
WINK report confirms IUL, VUL strong years
More confirmation of indexed universal life’s strong year came from WINK’s fourth quarter 2018 life sales report, released March 15.
According to Wink’s Sales & Market Report, indexed life sales for the fourth quarter were $617.4 million; up more than 16.8% compared with the prior quarter, and up over 7.2% compared to the same period last year. Annual indexed life sales were over $2.1 billion.
“Given the recent trends in indexed life product development, it is no surprise to see both a record quarter and a record year for indexed life sales,” said Sheryl J. Moore, President and CEO of both Moore Market Intelligence and Wink, Inc. “It will be interesting to see how the National Association of Insurance Commissioners potential amendment of AG49 regulation will impact future sales.”
Items of interest in the indexed life market per the WINK report included Pacific Life retaining the No. 1 ranking in indexed life sales, with a 16.4% market share. National Life Group and Transamerica ranked second and third.
Pacific Life’s Pacific Discovery Xelerator IUL was the top-selling indexed life insurance product, for all channels combined, for the sixth consecutive quarter. The top pricing objective for sales in 4Q 2018 was Cash Accumulation, capturing 75.9% of sales. The average indexed life target premium for the quarter was $9,781, an increase of more than 9.0% from the prior quarter.
Non-variable universal life sales for the fourth quarter were over $965.4 million; up 10.3% compared to the previous quarter and down 7.9% as compared to the same period last year. Annual sales for 2018 were over $3.6 billion. Non-variable universal life sales include both indexed UL and fixed UL product sales.
Pacific Life retained its rank as the No. 1 company overall for non-variable universal life sales, with a market share of 10.7% in 4Q 2018. Pacific Life’s Pacific Discovery Xelerator IUL was the top-selling product for non-variable universal life sales, for all channels combined, for the sixth consecutive quarter.
Fixed UL fourth quarter sales were $349.1 million; up 0.5% when compared with the previous quarter and down 26.3% as compared to the same period last year. Annual fixed UL sales were over $1.4 billion. Noteworthy highlights for fixed universal life in the fourth quarter included the top pricing objective of No Lapse Guarantee capturing 66.8% of sales. In addition, the average UL target premium for the quarter was $5,443, a decline of more than 5.0% from the prior quarter.
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