Windsor, CT, September 15, 2003 � Despite strong growth in universal life and whole life products, U.S. individual life insurance sales declined through the first half of 2003, weighed down by the continued slump in sales of variable products tied to equity performance, according to LIMRA International’s quarterly survey.
Overall, for the first half, annualized premium and face amount were down 4 percent and the number of policies sold was down 6 percent compared with the first half of last year. For the second quarter, annualized premium dropped 5 percent compared to the same quarter of 2002, while face amount and policy count declined 4 percent and 6 percent, respectively. Variable universal life (VUL) and variable life (VL) sales dropped even further in the second quarter, with annualized premiums down 41 percent and 56 percent, respectively, compared to the same quarter of 2002.
“Variable life market share has tracked closely with trends in the stock market, with about a quarter delay in response to a shift in the market,” said Elaine Tumicki, corporate vice president and head of LIMRA’s product research. “The recent increases in the stock market have not yet had an impact on variable life sales. Given the length of the recent bear market, it is difficult to predict how soon variable life sales will recover.”
While variable life products have tracked closely with stock market performance, fixed products (universal life and whole life) have shown the opposite trend. Both universal life and whole life recorded strong growth in the first half of 2003, with universal life annualized premium up 26 percent and whole life up 9 percent. UL now represents nearly a third of new premium.
LIMRA International is a worldwide association providing research, consulting, and other services to nearly 850 insurance and financial services companies in more than 60 countries. LIMRA was established in 1916 to help its member companies maximize their marketing effectiveness.
Limra International information is available at www.limra.com