When the final annual sales figures start rolling in for life insurance sometime this quarter, they're expected to show that 2011 was a solid, if unspectacular, year.
Experts who track the life insurance industry say overall sales were trending upward, portending not only a strong fourth quarter but also positive momentum for 2012. An impressive turnaround, considering how bleak things looked in certain segments just two or three years ago.
From hot products and sales channels to innovations on the product development front, here's a look at some of the key trends the experts see fueling life insurance markets in 2012:
Consumer concerns: Total individual life insurance premium grew 5 percent in the first nine months of 2011, according to LIMRA, due in large part to surging sales of whole life, indexed life and guaranteed universal life products. But there's much more to the story than that, say market watchers like Robert Kerzner, LIMRA's president and CEO. "What consumers are telling us is that they are far more concerned about retirement [issues such as income] and living too long than they are about dying prematurely. There's a message there."
The message, he says, is that consumers want life insurance products that offer the ability to build cash value, but in uncertain economic times like these, they'll sacrifice a measure of upside in exchange for greater certainty in terms of premium, death benefit and principal preservation.
Hot products: Through the first three quarters of last year, whole life premium grew 10 percent, reflecting the public's appetite for the certainty of premium and cash-value guarantees, along with lifetime coverage. An overall 6 percent year-to-date increase in WL policy count gives WL policies a 46 percent share of total life insurance policy count, according to LIMRA's calculations.
Indexed UL sales also are surging. "It's the right product for the times," says Kerzner. "People want a safe harbor in the storm and indexed products give them that downside guarantee and at the same time, you end up with more dollars in the till for retirement."
Indexed UL premium was up 35 percent through the first three quarters of 2011, according to LIMRA.
Indexed UL is finding appeal particularly in the expanding 60 to 70 age group, observes Randy Rowray, AAPA, vice president of marketing at the National Benefit Corp. in West Des Moines, Iowa. More insurers are entering the indexed UL marketplace to serve that fast-growing customer segment, resulting in richer participation rates for investors.
