Our Group Term Life Market Survey – Focusing on the Positive, Despite Negative Sales Results
Last year, we were pleased to report a rebound for the U.S. Group Term Life (GTL) industry, with a moderate 5% increase in new combined GTL and AD&D sales premium for 2019, as compared to 2018. However, just as companies were reporting these positive results, we were beginning to see the first wave of COVID‑19 unfold. The unexpected and sweeping changes that the pandemic brought forth significantly impacted 2020 new sales results; however, in‑force business maintained growth.
Positive highlights from our 2020 Group Term Life Market Survey include:
- Combined GTL and AD&D in‑force premium rose by 3% over 2019 reaching $29.3 billion, showing the strength of the marketplace. Over the many years that Gen Re has tracked results for the industry, in‑force premium has exhibited growth rates ranging from 0% to 5%. In fact, even after the financial crisis of 2008, reported in‑force premium for 2009 remained level.
- AD&D premium was up by 3% for new sales and by 1% for in‑force.
- Average new sales and in‑force face amounts for GTL trended upward, reaching over $100,000 for the first time since the inception of our market survey.
New Sales Results
On a less-than-positive note, combined GTL and AD&D sales premium reached $2.8 billion in 2020, representing an 8% decline compared to 2019 results. While we have seen volatility on the survey over time, this is the largest drop in sales premium reported since the financial crisis of 2008. Although we continue to see the impact that just a few carriers – particularly those in the top ten – can have on these results, 12 of the 17 companies participating in our survey reported a negative outcome this year, a decline in GTL new sales premium of 10% or more.
Given the scenario, one could focus more on the negative aspects that are challenging the industry. We choose to focus on the positive.
Our survey showed signs of carriers rising to the challenge. From implementing new approaches, to communicating with clients and distribution channels, to expanding wellness programs for employees, companies showed both creativity and fortitude in the face of adversity.
We believe that this creativity is just what the industry needs to maintain balance and persevere for the rest of 2021 and beyond. If you need help thinking about how to move forward, don’t hesitate to reach out to me.