Life Insurance Application Activity Continues to Disappoint
June 9, 2017 by Jay Cooper
Life Insurance Application activity continued to drop off in May, according to the MIB Life Index. The decline doesn’t bode well for life insurance sales this summer. The MIB Index measures life insurance application activity in the U.S., and is typically a three-to-four-month leading indicator of placed life insurance business.
May’s index decline continues a string of disappointing data points for the index. After five consecutive months of declining activity in 2017, the index is now down 3.3% year to date. May application activity was 8.3% lower than in April, though MIB executives caution that the drop is on par with seasonal norms.
May application activity was down 5.2% for the 45-59 age group compared to the same month last year. Activity for the age 60+ category was down 2.8% year-over-year while activity was flat for those below age 45.
For the year-to-date period, application activity for those under 45 is down 2.6%. Applications activity for the 45-59 group and 60+ category were down 5.5% and 1.7% respectively. Perhaps the only bright spot in the index was that May’s results showed a slight improvement in the year-to-date change for the 45 and under category.
A report on sales activity from Limra earlier this week also noted a decline in life insurance activity, with the number of new policies issued falling by 2% in the first quarter of 2017. While new policies were down, premium revenue edged up 5% relative to the first quarter of last year and policy face amounts increased 3%. Whole life annualized premiums experienced the most significant gains, rising 7% in the first quarter compared to the same period in 2016, according to Limra.
The Limra report tracks actual sales, not applications. The MIB Index tracks applications, and is a good indicator of future sales. The index is based on the number of searches MIB life member company underwriters perform on the MIB Checking Service database. “Since the vast majority of individually underwritten life premium dollars in North America include an MIB search as a routine underwriting requirement, the MIB Life Index provides a reasonable means to estimate new business activity,” the MIB Group explains on its website.
MIB Group executives were not available by deadline to discuss the index’s decline.