Economic clouds seem to be hovering over yet another line of insurance industry business. New annualized premium for individual life insurance saw a 14% drop in the fourth quarter of 2008, ending the year with an overall 7% decline, according to LIMRA’s quarterly sales survey.
The fourth quarter marked the single sharpest decline in premium since the fourth quarter of 1951, according to LIMRA International, a Windsor, Conn. research, consulting and professional development organization. The overall decline for the year erased the strong 7% gain of the previous year, and was the largest one-year decline in LIMRA’s records.
The last significant annual decline was in 1991, coming off a mild recession, when premium fell 5%.
The one bright spot in 2008 was the increase in whole life premium. Following a third quarter resurgence of 7%, whole life sales increased 2% in the fourth quarter, ending 2% higher for the year, reports the organization.
Universal life sales fell 23% in the fourth quarter. Variable universal life products continued to follow market trends, dropping 18% in the fourth quarter, finishing the year down 17%, notes LIMRA. Nearly 90% of the writers suffered declines, most in double digits.
Term life premium was down 3% for the quarter and 2% overall in 2008. Nearly 60% of term writers saw declines in 2008, with 30% experiencing double-digit declines.
The number of policies sold was down 10% in the fourth quarter, and finished the year down 4%.
For more information, visit www.limra.com/newscenter/databank/4QGrowthRates.pdf.
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