U.S. life insurance applications increased by 9.3% in July 2024 compared to July 2023, and the year-to-date growth stood at 1.7%, according to AM Best and MIB research.
US Life Insurance Companies to see growth earnings in 2024 while wrestling with the impact of higher interest rates, a dynamic annuities sector and the commercial real estate market’s effect on investment portfolios. The Life & Health insurance industry’s admitted assets grew by 5.6% (see TOP 100 Largest Life & Health Insurers in the U.S.).
Total U.S. life insurance new annualized premium fell 1% in the H1 to $7.4 bn and policies sold remained flat, according to LIMRA.
The total number of policies sold in the first quarter of 2024 were level with prior year’s results.
“Given the dominant role the top 20 carriers have on the U.S. life insurance market (representing 65% of the total new premium), LIMRA believes transparency is important and has decided — for the first time — to begin publishing the top 20 life insurance sales leaders,” said John Carroll, senior vice president, head of Life and Annuities, LIMRA and LOMA.
The number of policies sold, however, grew 4%, compared with first quarter 2023. VUL premium held 11% of the total U.S. life insurance market in the first quarter.
When compared to previous years, the year-to-date growth in July 2023 was 5.4% higher than in 2022 but 1.2% lower than in 2021.
Increases occurred across all face amounts
All age groups experienced year-over-year growth in July, with the most significant increase of 18.8% among those aged 71 and above. Applications for the 0-30 age group rose by 8.7%, the 31-50 group by 9.4%, the 51-60 group by 6%, and the 61-70 group by 10.2%.
- For the 0-30 age group, policies up to $250,000 showed growth, with amounts over $250,000 and up to $5 mn seeing double-digit increases. Policies over $5 mn declined in this group.
- For ages 31-50, all face amounts showed growth, with double-digit increases for policies above $250,000.
- The 51-60 age group also saw growth across all face amounts, particularly for policies between $250,000 and $5 mn.
- The 61-70 group recorded growth for all face amounts, with double-digit increases for policies up to $5 mn.
- For those aged 71 and above, all face amounts up to $5 mn saw double-digit growth, with policies over $5 mn achieving triple-digit increases.
Life Insurance Policy Growth by Age Group and Face Amount
The infographic based on the data you provided, displaying the growth of life insurance policies across different age groups and face amounts.
Term and whole life insurance policies saw double-digit growth in July compared to the previous year, with term life up 18% and whole life up 15.9%. In contrast, universal life policies experienced double-digit declines across all age groups.
Life insurers’ portfolios are largely comprised of high-quality loans, with 90% of commercial mortgage loans (CML) rated CM1 or CM2 on an NAIC basis, along with de minimis troubled mortgages and an average LTV ratio of 54% for 2024 (see TOP 20 Largest Life Insurance Companies).
Fitch expect to see continued deterioration in CML portfolios, as valuations normalize and losses increase amid the worsening economic backdrop.
U.S. life insurers allocated 13% of their total investment portfolios to mortgage loans, or 1.6x capital, which is stable yoy but above historic levels of 8-12%. Life insurer commercial mortgage portfolios as of YE 2023 were comprised of multifamily loans at 30%, office at 20%, industrial at 16%, other mortgages at 16%, retail at 13%, hotel at 3% and mixed-use properties at 2%.
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