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Bank-sold Life Insurance Premium Falls for Second Straight Year: Kehrer-LIMRA
4/19/2007
WINDSOR, Conn., April 19, 2007 — Pulled down by a steady decline in single-premium sales, individual life insurance premiums sold through banks in 2006 fell for the second year in a row, according to the latest survey from Kehrer-LIMRA. The survey found that premiums have fallen from a high of nearly $1.3 billion in 2004 to $1.06 billion for 2006.
"Competition with rates on certificates of deposit has impacted bank single-premium sales," said Kenneth Kehrer, director of the survey. "The industry sold 11 percent less single premium in 2006 than it had in 2005, which itself saw a 12 percent decline from 2004. In addition, 2006 first-year premiums were only even with 2005. In the end, total bank life sales dropped nine percent in 2006."
According to Ashley Durham, the analyst who authored the report, only six carriers brought in more first-year bank premiums in 2006 than in the previous year. While the majority of the declines were quite large, so were the increases. All in all, first-year premiums were even with 2005 and represented 16 percent of total bank sales in 2006. In addition, bank market share of the life industry declined as a percentage of annualized new premium, both on an overall and a at the product basis level.
About Kehrer-LIMRA
Kehrer-LIMRA, a subsidiary of LIMRA Services, is the leading provider of information and consulting services on financial institutions as financial services stores. The firm's studies of sales penetration, profitability, compensation, and compliance have helped many banks, savings associations, and credit unions benchmark their investment sales program performance and understand the key drivers of success. Kehrer-LIMRA research reports are available for purchase.
About LIMRA International
LIMRA International is a worldwide association providing research, consulting, and other services to nearly 850 insurance and financial services companies in more than 60 countries. LIMRA was established in 1916 to help its member companies maximize their marketing effectiveness.