In recent months, many life insurance issuers have likely noticed that the amount of business they're doing has taken a bit of a tumble, and that trend unfortunately continued into the month of February.
While the entirety of 2012 saw an increase of life insurance activity nationwide equaling 1.4 percent, 2013 hasn't been so kind to the industry as a whole, thus far, according to the latest MIB Life Index from MIB Solutions. In total, activity in February declined 4.5 percent, marking the second consecutive month to see a dip from that seen the previous year.
However, it should be noted that when compared to the same month in 2011, there has been some improvement. In fact, the numbers seen in February are also up from those in January, the report said. Nonetheless, the composite index is still down 3.5 percent year-to-date.
The largest decline in activity came from consumers aged 45 to 59 years old, for which there was a drop of 6.2 percent, the report said. That's up significantly from the 3.2 percent dip seen in January, as well as the 0.6 percent dip observed in December 2012. Perhaps more troubling was the 3.3 percent decline among people who were 60 years old and up. That number itself was a slight step back from the 2.6 percent drop seen in January, but moreover, it was the first time since 2007 in which there were two consecutive months in which activity among this age group declined. However, activity among this oldest demographic increased by double digits in 2012, so the damage seen more recently might not be as bad as it appears.
Finally, the 3.9 percent drop in activity in February among customers 44 years old and younger, was a further decline from the 1.7 percent drop seen in January. Those declines were somewhat offset by sizable gains throughout 2012.
Life insurance providers may see these lower numbers at the start of the new year as being a sign that they need to redouble efforts to reach new customers. Many studies have shown that people who otherwise might be buying coverage have largely eschewed doing so in recent years because of financial constraints, as well as their belief that these policies are mostly luxuries, rather than necessities.