According to survey research conducted by LIMRA, fifty-nine percent of insurance executives believe overall individual life insurance sales will remain flat and 68 percent feel group life sales will stall in 2011. The survey questioned 70 industry leaders in early December 2010.
A press release reporting the survey findings at the LIMRa website states, “Generally speaking, significant growth in life insurance sales is driven by new products in the market,” said Robert Baranoff, LIMRA senior vice president and co-author of the report. “While overall sales may not substantially grow in 2011, LIMRA predicts that certain products will stand out in this low-interest environment,” Baranoff continued.
On a bit of a positive, but still cautionary note, one- third of respondents suggested that indexed insurance products had the most growth potential in 2011. 27 percent of survey respondents, meanwhile, felt whole life insurance would continue its recent growth when compared to term insurance. Universal life and term insurance products each received about 20% of the votes.
The majority of executives feel there will be growth in sales to the middle market resulting in an increase in policy count overall. with the number of U.S. households lacking or underinsured for life insurance at a 50 year record high, more companies are targeting this specific market niche.
Traditional sales efforts, respondents said, distribution will continue to struggle in 2011 as a vast majority (75%) of executives surveyed felt that the sales force will continue to shrink in 2011. After two years of increased recruiting (2007 and 2008), agent recruiting was down in 2009 and the first half of 2010.
However, bancassurance (bank distribution of life insurance products) is expected to continue to grow in 2011, according to almost seven in 10 executives. Bancassurance has been strong over the past five quarters, culminating in a 30 percent increase in the third quarter of 2010. While executives feel there is strong potential for this channel, U.S. insurers have never been able to fully capitalize on this potential.