2004 Variable Life Sales At $2.7 Billion, Rose 11% From 2003

For the companies reporting sales by distribution channel for 2003, career agents and independent broker-dealer firms dominated flexible-premium variable life sales, capturing 52% and 38% of the market, respectively.

Career agents and independent broker-dealer firms dominated single-premium variable life sales in 2003, capturing 55% and 24% of the market, respectively. Regional firms captured 19% of the market and wirehouses had 2%.

As of Dec. 31, 2004, total variable life assets for the companies reporting in VALUE were $105.3 billion, up 10% from $95.8 billion on Dec. 31, 2003. Of the total assets reported, 91% were held in a separate account.

VALUE classes funds into the following categories: growth, aggressive growth, growth and income, international stock, government bond, corporate bond, high-yield bond, international bond, money market, balanced and specialty (e.g., gold, real estate).

As of Dec. 31, 2004, approximately 75% of the variable life separate account assets were in stock funds; 12%, bond funds; 2%, money market funds; 4%, balanced funds; and 7%, specialty funds.

Fixed account interest rates on VL policies continue to decrease. The average one-year interest rate on Dec. 31, 2004, was 4.31%, down from 4.41% on Sept. 30, 2004. The average renewal rate on Dec. 31, 2004, decreased to 4.71% from 4.84% on Sept. 30, 2004.

Geraldine Murtagh, CLU, ChFC, is with the Tillinghast business of Towers Perrin.

Reproduced from National Underwriter Edition, April 1, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.