Life insurance applications up 3% in 2023; first rise in nearly 4 years
Application activity for U.S. life insurance grew at a near 3% rate in 2023 compared to the previous year showing the first uptick in almost four years, according to the MIB Group, a member-owned company that provides underwriting services to life and health insurance companies.
The 2023 year-to-year comparisons are impacted by the decline in 2022 applications. MIB reported that total activity last year was down 2.8% compared to 2021, flat compared to 2020, but up 4.4% compared to 2019.
“The year-over-year comparisons can fluctuate,” said Betty-Jean D. Lane, MIB’s head of marketing. “Of course, the COVID pandemic had an impact on 2020 results, which were record breaking. Further, the year-over-year decline in 2022 was not entirely unexpected, since it was in comparison to a very strong 2021, which had the second highest year-over-year growth in the last 10 years.”
Dec. life insurance applications up 6.5%
Applications in December 2023 were up 6.5%, compared to December 2022, representing the second highest year-over-year growth rate for the month of December on record, MIB said. Only September showed a decline in applications last year with all other months showing gains or flat activity.
“Growth in 2023 represents a reversal of patterns seen in 2022, where all months saw YOY declines or flat activity,” MIB said.
Insurers use MIB data as a guide to verify the information they receive on an application matches with other applications submitted over the past seven years. MIB’s data helps insurance companies identify possible errors, omissions, and misrepresentations on applications.
Source: MIB Life Index
Growth drive by younger groups
The growth in 2023 was largely driven by younger age groups, MIB said, with application activity for ages 0-50 accelerating, while ages 51-70 saw declines, and ages 71+ saw flat activity.
During 2023, activity for ages:
0-30 was up +5.4% YTD in 2023
31-50 up +5.5%
51-60 down -1.9%
61-70 down -2.5%
71+ flat at +0.7%
“When examining monthly YOY growth by age band, we saw zigzagging patterns throughout 2023, most notably during Q4,” MIB’s report said.
All product types saw YTD growth in 2023 with Term Life up +2.0%, Universal Life up +6.9%, and Whole Life up +2.2%.
When breaking down activity by product type into age bands, term life saw YTD growth for ages 0-50, flat activity for ages 51-60, and double-digit declines for ages 61+.
Universal life saw double-digit YTD growth for ages 0-50, and flat activity for ages 51+.
Whole life saw YTD growth for ages 0-50 and ages 71+, declines for ages 51-60, and flat activity for ages 61-70.
“It is worth noting that ages 0-50 experienced year-to-date growth for all product types, in the double digits for Universal Life,” the report said.
MIB will publish its annual report later this month that should shed more insights into long-term trends, said Lane.
Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at doug.bailey@innfeedback.com.
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