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December 29, 2002 at 07:00 PM
3rd Quarter Variable Life Sales Off 31% From Last Years 3rd Quarter
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Variable life sales continue to erode. VL sales with single premiums included at 10% for the 53 companies reporting in Tillinghasts VALUE survey for the third quarter of 2002 were $868 million, with year-to-date sales at almost $3.1 billion. This is a 31% decrease from the third quarter of 2001 and a 20% decrease from the second quarter of 2002, which had sales of $1.085 billion.
(Sales include first-year annualized premium, drop-in premiums and single premiums.)
The market estimate for the first nine months of 2002 with single premiums included at 10% is $3.15 billion.
The decrease in variable life sales can be attributed to the volatile and depressed equity markets shifting sales to fixed products and the lagging economy.
Variable life sales with single premiums included at 100% for the 53 companies in the VALUE survey for the third quarter of 2002 were $916 million. This is a 30% decrease from the third quarter of 2001 and a 19% decrease from the second quarter of 2002.
The market estimate for the first nine months of 2002 with single premiums included at 100% is $3.33 billion.
For 2002, the top five companies/fleets–Pacific Life, Hartford Life, MetLife/NEF/GenAm, IDS Life and Equitable–captured 34% of all variable life sales (including single premiums at 10%), while the top 10 companies/fleets garnered 57% of all sales.
For the first nine months of 2002, Pacific Life reported the highest annual premiums ($145.2 million) and ranked first based on total sales (including single premiums at 10%).
For the companies reporting in the survey, the number of flexible premium contracts issued during the first nine months of 2002 decreased 25% from the number issued during the first nine months of 2001. The average face amount increased 4% to $293,739, while the percentage of premium allocated to the general account increased to 6%.
