Insurance Machine

A drop in Activity with Regard to New Applications for Life Insurance was off 8.9% in December According to the
MIB Life Index Report for North American Life Insurance

BRAINTREE, Mass., Jan. 19

According to the MIB Life Index, in December of 2008, for individually underwritten life insurance, North American application activity declined -8.9% year-over-year. The year-to-date activity with regard to new applications was led by a -4.3% decline in overall fourth quarter activity, and, as compared to last year, was off -2.5%. The only demographic that showed growth was of those applying for individual life insurance who are ages 60+, which was up, as compared to 2007, +4.3% YTD.

For December, U.S. application activity was off sharply. Year-over-year comparison shows a drop of -9.3%, for all ages combined. In addition to this, a decline in the fourth quarter of -4.5%, was a contributing factor to 2008's -2.9% drop in annual application activity when compared with 2007. This is still the smallest annual YTD decline since 2004. The only area of growth was the group ages 60+ which was up +5.2% YTD. This may be compared with overall losses for the 0-44 and 45-59 age groups, which were off, when compared to 2007, respectively, 4.9% and -1.9% YTD. As a percent of the total MIB Life Index, when comparing year-over-year growth since April 2007, as regards the proportion of applications ages 60+, there has been an increase of from 8.4% (2001) to 12.2% (2008). It was December's drop in activity for ages 0-44, which was off -12.8% year-over-year, that reflected most apparently the economic downturn. This drop represents the largest decline in any age group in either country, the United States or Canada.

For Canada, application activity is reported as being off in December year-over-year, by -5.6% for all ages combined. When compared against the year 2007, year-to-date, 2008 activity was up slightly at +0.7%.

Canada's 0-44 and 45-59 finished up +1.3% and +0.5%. This reflects a reversal of U.S. YTD results, respectively. This was underscored when ages 60+ were off -2.8% as compared with 2007. At the same time to in the United States, activity in the 0-44 age group is shrinking, Canada shows a 2008 YTD growth of +1.3% which represents this groups largest year-over-year percent increase going back to 2002. During the first two months of the year, solid gains were established and reported for new life applications in the 0-44 and 45-59 age groups. However, for ages 60+ declining activity was posted in nine of the last twelve months. The reported -13.8% decline for activity in all age groups combined, reporting from November to December, is a reflection of the seasonal norms for this time of the year.