Life insurance coverage premium reversed three straight quarters of declining development, LIMRA reported, with $4.04 billion in new premium within the second quarter, a 2% improve.
Even higher, preliminary outcomes from LIMRA’s U.S. Retail Particular person Life Insurance coverage Gross sales surveys and estimates additionally present a rise in insurance policies offered.
“General, complete life and time period merchandise recorded the best premium development, propelling the constructive outcomes this quarter,” mentioned John Carroll, senior vice chairman, head of Life & Annuities, LIMRA and LOMA. “Entire life and time period merchandise sometimes serve the middle-income market. As financial circumstances proceed to enhance, customers could have felt extra assured to buy protection to deal with their life insurance coverage wants and shield their households’ monetary safety.”
Coverage depend rose 4% within the second quarter, in contrast with the prior yr. That is the second consecutive quarter of coverage gross sales development.
Whereas new annualized premium fell 3% to $7.8 billion within the first six months of 2023, coverage gross sales elevated 4% over the identical interval in 2022. LIMRA is learning why youthful generations worth life insurance coverage, however will not be buying it.
The COVID-19 pandemic motivated many People to purchase life insurance coverage, however that gross sales bump appears to have handed.
Entire life new premium jumped 6% to $1.6 billion within the second quarter, marking the biggest development in premium since first quarter 2022. 12 months-to-date (YTD), complete life new premium elevated 1% to $3.1 billion. Along with the premium development, coverage gross sales additionally rose, up 3% within the second quarter and 4% YTD. Entire life premium represented 40% of the full U.S. life insurance coverage market within the first half of 2023.
Time period Life
For the second consecutive quarter, time period merchandise recorded constructive gross sales development. With about half the businesses reporting will increase, time period new premium totaled $776 million, up 6% within the second quarter. Within the first half of 2023, time period new premium was $1.5 billion, a rise of three%, in contrast with prior yr outcomes. Coverage gross sales additionally noticed a lift within the second quarter, up 4% for the quarter and a pair of% YTD. Carriers had been almost definitely to report a rise in shopper curiosity and a rising use of automated underwriting as causes for the expansion in 2023. Time period life premium held 19% market share within the first six months of 2023.
Listed Common Life
After double-digit premium development in 2022 pushed by adjustments in IRS tax code 7702, listed common life (IUL) product gross sales continued to normalize. Second quarter IUL new premium was $937 million, down 3% from prior yr. YTD, new premium fell 10% in contrast with the primary half of 2022. The expansion in variety of insurance policies offered remained excessive within the second quarter, up 22%, leading to a 23% improve YTD. IUL premium represented 23% of complete U.S. premium offered YTD.
“The elevated gross sales of smaller IUL insurance policies continued following the Could 1 implementation of NAIC mannequin (AG-49B),” mentioned Karen Terry, assistant vice chairman, head of LIMRA Insurance coverage Product Analysis. “The brand new NAIC mannequin will seemingly proceed to have an hostile impact on IUL premium whereas coverage gross sales are anticipated to extend amongst a variety of carriers together with these promoting in a decrease face market.”
Variable Common Life
Variable common life (VUL) premium elevated 3% within the second quarter to $478 million. The variety of VUL insurance policies offered within the second quarter fell 2%. YTD, VUL premium totaled $899 million, down 1% following the 40% development skilled within the first half of 2022. Coverage gross sales dropped 10% within the first half of the yr. VUL premium represented 12% of the full U.S. life insurance coverage market within the first half of 2023.
Fastened Common Life
After 4 consecutive quarters of declines, mounted common life (mounted UL) new premium surged 11% in June lifting second quarter development out of a four-quarter decline. Gross sales had been up 1% within the second quarter at $265 million. YTD, mounted UL new premium was $503 million, 8% decrease than the prior yr’s outcomes. The variety of insurance policies offered, nevertheless, dropped 12% for the quarter and YTD. Fastened UL premium held 6% market share within the first half of the yr.
LIMRA’s preliminary second quarter 2023 U.S. particular person life insurance coverage gross sales outcomes are primarily based on month-to-month reporting and preliminary quarterly survey knowledge, representing 80% of the full market. A abstract of the outcomes may be present in LIMRA’s Reality Tank.