New annualized universal life premiums advanced between the second quarter of 2013 and the same quarter of 2014. This is the first premium growth for this product since the fourth quarter of 2011.New universal life insurance premiums grew by 1% in the second quarter of 2014 compared with the same quarter of 2013, says the latest LIMRA survey on individual life insurance sales in Canada. “Even a small increase in this product is good news,” LIMRA’s research director Rob Kanehl wrote in his report.
Overall, new life insurance premiums reached $306.3 million in Q2, versus $287.7 million a year earlier, for growth of 6.5%. The number of life insurance policies sold in the second quarter dropped by 7.6%, to reach 179,822, down from 194,636 a year earlier. “Policy sales remained down again in the second quarter, as well as year-to-date. The decline was more widespread in the second quarter than in the first,” Kanehl points out.
In the first half of the year, life insurance sales in terms of new premiums rose by 8% compared with the same comparison period in 2013. Between these two periods, the number of policies sold sunk by 7%.
The independent network drove this premium growth the most, gaining 11% in Q1 2014 compared with the same quarter in 2013. Affiliated agents posted growth in new premiums of 5% in Q1 2014 compared with the same quarter in 2013.
In the first half of the year, whole life remained an engine for individual life insurance sales in Canada, fueling growth of 20% for that period. The number of policies edged down by only 1%.
Yet this growth is waning, LIMRA notes. “Fewer than half of those carriers selling these products posted increases in the first half of 2014,” Kanehl says. Although, four of the five players reported “double-digit gains” in whole life insurance sales.
Despite a good second quarter, universal life premiums slid by 2% in the first six months of 2014 versus the same period in 2013. The number of universal policies fell by 7% during this comparison period.
Term insurance stagnated: new premiums slipped by 1% in the first half of 2014 compared with the same period in 2013. The number of policies declined by 9% during this comparison period.
Half of new individual life insurance premiums sold in Canada in the first half of 2014 were whole life, 28% went to term insurance and 22% universal life – another downturn for UL, which had garnered 24% of new premiums in the same period a year earlier.