There are many predictions of how long the current global financial crisis and economic downturn will last. Some say the end of 2010, some say longer. In either case, Robert Kerzner, president and CEO of LIMRA International and LOMA, predicts the U.S. life insurance industry will look different when that time comes, according to an A.M. Best story. He says companies will have exited lines of business that are just too risky or hard to price, or be merged into or acquired by others.

If Q4 reports are any indication, Kerzner could be right. 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. The overall decline for the year erased the strong 7% gain of the previous year, and was the largest one-year decline in the organization’s records.

The last significant annual decline was in 1991, coming off a mild recession, when premium fell 5%.

A.M. Best reports that aside from the big changes looming on the horizon, Kerzner says there are some bright spots and positive news for the industry. Research suggests that consumers “still have more faith in life insurance companies than they did in other financial institutions, and they have far more trust in some of their financial advisers—their life insurance agents in particular—than they did, say, in some stock brokers and others,” he says.

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