After a difficult 2013, critical illness insurance sales are recovering, the latest LIMRA survey reports. New premium sales advanced 4% in the first quarter of 2015 compared with the same quarter of 2014.
Across the board, new CI premiums reached $25.2 million in the first quarter. 23,783 policies were sold in Q1, roughly the same number as in the first quarter of 2014.
Permanent and limited period level (LPL), hobbled by price hikes in 2014 caused by low long-term interest rates, fuelled growth this year. The Canadian industry sold $7.9 million in new permanent product premiums in the first quarter of 2015, 6% more than in the same quarter of 2014. LPL premium sales were $12.1 million in the same comparison period, equal to growth of 7%.
New premiums in renewable critical illness insurance sank by 5% in the first quarter of 2015 compared with the same quarter of 2014, to reach $5.2 million.
The number of policies sold remained stable for each of the three product categories.
“While results were positive for LPL and permanent premium sales, both products still remain below 2013 levels for the same time period,” analyst Rob Kanehl commented in the LIMRA report. In contrast, results for renewable CI were much stronger than those of 2013, despite what the analyst calls a “small decline.”
Kanehl points out that the reasons for the shift back to guaranteed products varied across carriers. No overall theme emerged, he says.
However, the industry recognizes that permanent and LPL critical illness insurance products were dragged down by price hikes in 2013. In a 2013 report, LIMRA wrote that sales in 2012 were stimulated by anticipated price hikes.
Around since only 1995, critical illness insurance qualifies as a young market. CI premiums in the first quarter of 2015 totalled $785.5 million, up 7% since the same quarter of 2014. In Q1 2015, this market had 699,203 policies in force, corresponding to 7% more than in the same quarter of 2014.