2024 MIB Life Index At-the-Half
Originally posted by: MIB
The first half of 2024 has seen significant fluctuations in U.S. life insurance application activity, with monthly year-over- year comparisons ranging from a high of +10.3% in April to a low of -6.6% in March.
Ending the first half of 2024 flat at +0.6% year-to date compared to 2023. When taking a long-term lookback, we again see fluctuations, not only in aggregate activity but also when reviewing activity by age band, face amount and product type.
I’m Alston Ellis, Chief Financial Officer for MIB and I’m here to present you with a mid-year analysis of long- term trends in U.S. life insurance application activity, as reported to MIB and represented in the MIB Life Index, through June of 2024.
Let’s start our analysis by taking a 5-year lookback at application activity by age band.
There have been significant shifts in trends across age bands throughout this time period, with the widest fluctuations for ages 71+. As we have reported previously, older age bands ages 61+ have led in year-to-date growth for several of the years prior to the pandemic. During and since the pandemic, we have seen fluctuations, most recently with a zig zag pattern in 2023, that has continued into 2024. And as of the end of the first half of 2024, the 71+ age band is in the lead for year-to-date growth.
When taking the same 5- year lookback for activity by face amount, we again see fluctuations, with the pandemic having the most significant impact in 2020 and 2021 on year-over-year comparisons for applications over $5M. However, since the beginning of 2023 all face amounts above $250,000 have been consistently at growth. And we see a notable long term upward trend in face amounts over $1M, up to and including $2.5M since Q1 of 2022.
When analyzing application activity by product type, where this information is reported to MIB, we again see fluctuations in our 5-year lookback. While these fluctuations appear across all product types, they are most notable for Universal Life, and most stable for Term Life products. It is likely that, in part, this fluctuation is related to the investment savings element of Universal Life and fluctuating expectations around rates of return. As of mid-year 2024, we are seeing a significant drop- in activity for Universal Life, and a corresponding spike in activity for Whole Life, during a time when there is much speculation about the potential for interest rates to drop.
Looking deeper at the decline in Universal Life application activity in Q2 of 2024, we examined activity at the state level. The most significant declines for Universal Life in Q2 year-to- date were in Alabama, South Carolina, Alaska, New Mexico and Georgia. Interestingly, application activity for Universal Life was at growth at the end of Q2 2024 for several states in the northeast including New Hampshire, Vermont, Connecticut, New Jersey, Maine and Rhode Island as well as Montana, South Dakota, North Dakota, Wisconsin, Nebraska, and Minnesota. All other states saw declines or had flat activity for Universal Life through Q2.
Adding in age bands to our long- term analysis of product type, we compared 2024 year-to-date activity at mid-year, to an average of activity at mid-year across a 4-year span, from 2020 to 2023.
Based on this analysis, growth rates for both term and universal life application activity declined as age increased, with both products seeing growth for ages 0- 50, and declines for ages 51+. In contrast, Whole Life saw declines only for ages 51-60, flat activity for ages 0-30, and growth for other age bands. With the highest growth rates observed for the oldest age bands.
Turning to aggregate application activity, we refreshed the analysis we published last year, comparing year-to-date activity at mid- year, to year end activity over a 10-year period. The analysis continues to confirm that mid-year and year end results are typically directionally similar.
Additionally, the majority of year-end results were within two percentage points of mid-year results over the 10-year period. With 2024 mid-year application activity flat at +0.6% year-to-date, we will be keeping a close eye on the second half of 2024 to see if this pattern continues.
We hope that you have found these additional insights on long term trends at the half, informative and helpful. This analysis of application activity is just a small sample of the type of insights MIB can deliver to our members. If you are interested in learning more about how MIB’s new Aptivity- data and analytics service can provide insights into your organization’s activity trends, please reach out to your account representative.
Once again, I’m Alston Ellis, Chief Financial Officer from MIB. Thank you for watching.