Factoring in 5% year-over-year growth in the fourth quarter of 2016, total U.S. life insurance new annualized premium grew by 3% last year while policy numbers were flat, according to LIMRA’s Fourth Quarter Retail Life Insurance Sales Survey.
“As we have seen over the past several years, whole life sales were instrumental in overall life insurance premium growth in 2016,” said Ashley Durham, associate research director, LIMRA Insurance Research. “Since the economic downturn, the U.S. life insurance market has experienced steady growth, with overall premium sales increasing by more than 20%.”
Whole life insurance new annualized premium jumped 11% in the fourth quarter, resulting in whole life premium increasing by 9% in 2016. Seven of the top 10 whole life writers reported growth in the fourth quarter. This was the 11th consecutive year of growth for whole life premium, which has never happened since LIMRA started reporting on product-level data in 1983.
Whole life represented 36% of the total life market in 2016.
Universal life (UL) new annualized premium increased 6% in the fourth quarter. Both indexed UL (IUL) and lifetime guarantee UL (LTG) recorded growth in the quarter, which has not occurred in more than three years.
UL premium growth was flat for the year. Total UL represented 37% of all life insurance sales in 2016.
IUL premium improved 2% in the fourth quarter and 1% in 2016. Half of the IUL writers reported growth. Before the implementation of regulation AG49 (designed to make the illustrations more consistent), IUL sales grew by double digits, on average more than 25% annually since 2007.
In 2016, IUL represented 56% of UL and 21% of all individual life premium.
LTG premium jumped 23%, compared with fourth quarter 2015. This is the strongest quarterly growth of LTG products since fourth quarter 2012. LIMRA attributes growth to increased focus on the market and improved competitive positions. Year-end, LTG premium increased 5%.
LTG UL represents 21% of UL sales and 8% of total life premium for the year.
Variable universal life (VUL) new annualized premium dropped 9% in the fourth quarter with only 3 in 10 carriers reporting VUL growth in the quarter. For the year, VUL premium fell 11%.
VUL market share was 6% of total sales in 2016, far lower than the 33% market share held in 2000.
After eight consecutive quarters of growth, term life insurance new annualized premium fell 1% in the fourth quarter. However, term premium ended 2016 1% higher than prior year. Term market share was 21% in 2016. It has been in the 21-22% range since 2011.
The latest data table and additional statistics on U.S. life insurance sales trends can be found in the newly updated Data Bank.
- InsureTech Spotlight: Hurdlr app lets agents track income, expenses and taxes instantly
- Insurtech Updates: Launches, expansions, partnerships and more
- NAIFA launches LACP designation as new ‘gold standard’ for life and annuity professionals
- Partial Fiduciary Rule implementation starts Friday – with no enforcement
- More than 8 in 10 advisors now use social media for marketing, researching prospects and building relationships
- Resources being rolled out to help with partial Fiduciary Rule compliance
- Best-ever start to a year for indexed life sales, new report says
- Diversity, innovation top agenda at Women in Insurance Global Conference