(Westwood, Mass. – January 26, 2006) Applications for individually underwritten life insurance in North America were off -5.5% in December, year-over-year, according to the MIB Life Indexsm. This marks the eleventh consecutive month of year-over-year decline in 2005. In total for all of 2005, North American applications were off -3.3%, all ages combined compared to 2004. When coupled with declining activity 2 (-2.3%) and 2003/2002 (-3.0%), the industry is experiencing a 3-year decline in applications in excess of 8%.
For December, U.S. application activity was off -5.8% year-over-year, all ages combined; and off -3.4% for all of 2005, compared to 2004. One year ago, 2004 application volumes lagged that of 2003 by -2.5%. 2005 U.S. yearly declines were modest-to-flat across all 3 age groups: 0-44, -4.3%; 45-59, -2.7%; and 60+, -0.4% as compared to 2004. Notably, the 0-44 age group, which comprises approximately 60% of all application activity, has declined -7.0% over the past two years.
Canadian application activity in December was off -3.0% year-over-year, all ages combined; and off -1.9% for all of 2005, compared to 2004. One year ago, 2004 application volumes lagged that of 2003 by -0.6%. 2005 Canadian yearly declines mirrored that of U.S. activity across all 3 age groups: 0-44, -2.3%; 45-59, -1.2%; and 60+, -0.2% as compared to 2004.
�Declining application activity is contrasted by industry-wide increases in aggregate premiums and average face amounts of new individual life policies. Our data show that activity in the 60+ age demographic is slowly crowding out application activity at the younger ages. This is another manifestation that the middle and lower end of the market continues to remain underserved by current distribution and product designs,� says Stacy Gill, MIB�s Chief Knowledge Officer.
| Monthly Percent Change vs 2004 | |||
| US | Canada | Total | |
| December 2005 | -5.8% | -3.0% | -5.5% |
| November 2005 | -2.0% | +2.8% | -1.4% |
| Q4 2005 | -3.7% | +0.1% | -3.2% |
| YTD 2005 | -3.4% | -1.9% | -3.3% |
| 2005 vs 2004 | |||
| US | Canada | Total | |
| 0-44 | -4.3% | -2.3% | -4.0% |
| 45-59 | -2.7% | -1.2% | -2.5% |
| 60+ | -0.4% | -0.2% | -0.4% |
| Monthly Percent Change vs Previous Month | |||
| US | Canada | Total | |
| December 2005 | -3.5% | -17.4% | -5.3% |
About the MIB Life Index
The MIB Life Index is the life insurance industry’s timeliest measure of application activity across the U.S. Released to the media each month, the Index is based on the number of searches life member company underwriters perform on the MIB Checking Service database. Since the vast majority of individually underwritten life premium dollars in North America include an MIB search as a routine underwriting requirement, the MIB Life Index provides a reasonable means to estimate new business activity.
About MIB
MIB is the life and health insurance industry’s most trusted resource for risk information and analytical services. Owned by the industry it has served for more than a century, MIB is uniquely positioned to aggregate industry insights in order to develop products and services for our members that improve their risk management decisions. MIB, Inc. and MIB Solutions, Inc. are wholly-owned subsidiaries of the MIB Group, Inc. Visit www.mib.com.
