Sales of life insurance continued their trend of modest growth in 2015, according to quarterly sales reports from LIMRA. The majority of the sales volume came from universal life insurance policies, which recorded a 10 percent rise in annualized premiums in the third quarter of 2015. Policies for universal life insurance plans also rose by 8 percent over the last quarter.
Whole vs. universal
Whole life insurance policies grew at identical rates, and together with universal life, these two policy types represented the bulk of sales in the life insurance industry during the third quarter. Universal life, however, retained a larger portion of market share compared to whole life plans. Universal life now accounts for 38 percent of the life insurance market, compared to 34 percent for whole life plans.
According to the LIMRA report, total sales by either affiliated or independent agents reached $3 billion in the first nine months of the year. Affiliated agents saw the majority of their premium growth in universal life, while independent agents had the most success with whole life plans. However, affiliated agents controlled a larger portion of whole life market share, with 52 percent. Similarly, independent agents have the largest stake in the universal life market, at 61 percent. LIMRA noted that agents of either type sold nearly the same amount of term premium as this same period last year. Some companies saw mild sales growth thanks to competitive pricing, but LIMRA said not to expect much more growth over the next several years due to a variety of factors.
Growth by distribution channel
LIMRA noted that larger agencies and brokerages saw comparatively smaller sales growth than in the past, but each of them constituted around a third of the premium sold in 2015. Personal producing general agencies (PPGA) saw the bulk of growth in premium, with 28 percent coming from this channel alone. Wirehouses comprised 18 percent of annualized premium growth. The only negative growth channel was banks, which saw premium sales shrink by 10 percent. LIMRA speculated recurring premium products are less of a fit for the generally “transactional environment” of a bank. Banks like Bank Mutual in the northern Midwest are beginning to downsize due to lower life insurance sales volumes, combined with a general decrease in the need for other traditional bank services.