Life Insurance Apps on the Rise

An interview with Lee B. Oliphant, CEO and President of MIB

As ceo and president of mib Group, Lee B. Oliphant oversees one of the leading indicators of the life insurance industry – the mib Life Index. Mib’s 450 North American member companies use its mib Checking Service to protect against anti-selection and improve risk selection for individually underwritten life insurance. Compiled from this activity, the mib Life Index serves as a reasonable proxy for new life insurance sales. In an interview with insurancenewsnet, Oliphant discussed the recent increase in life insurance applications and what producers need to know about it.

Inn: What is the overall trend in the Life Index?

Oliphant: We were seeing 3 or 4 percent decreases on an annual basis in the overall composite Index. But, over the past couple of years, we’ve seen some stabilization across age groups—where it is relatively flat or even up a little bit in calendar-year 2011 through March of this year. March results in the Index showed moderation after significant growth experienced from December 2011 through February of this year. While these gains are encouraging, it will take sustained increases and sales to younger generations for the life insurance industry to grow.

Inn: What do you see happening within the demographic groups?

Oliphant: When we look at some of the demographics, the 60-plus age group is the fastest growing group in the Index—going from single-digit to doubledigit, year-over-year growth over the past couple of years. The demographic itself is a growing percentage of the U.S. Population with boomers just moving into retirement age. But we’re also seeing now how that group is the beneficiary of the largest generational wealth transfer in history, with an increasing

Need for life insurance for tax and estateplanning purposes. The next age group, 45-59 years old, has stabilized a bit over the last two years after successive 3-4 percent declines. This is encouraging as the younger ages in this group represent individuals in their peak earning years and their spending power is combined with the need for insurance. We see this group continuing to strengthen from 2012 forward as the economy slowly strengthens. The last group, which is the largest in the total overall Life Index, is the under- 45 age group. This group actually has lost ground over each of the last five years, dropping by 4 or 5 percent through the end of 2011. This is a group with traditional needs for insurance—beginning a family, paying a mortgage and starting their children’s’ college savings—but it’s probably been the hardest hit group from

Tends to be a little bit different nowadays. They are more of an Internetbased buyer, tending to rely on social media more. As the industry embraces social media as a marketing tool, I think it will reach this group more effectively. But that’s a challenge for the industry—how to serve a group that has really changed dramatically over the past number of years in its buyer behavior and buying patterns.

Inn: We have all seen the limra sta- tistic, showing the 50-year low in life insurance ownership. Do you see any changes coming to that in light of the recent uptick in your data?

A disposable income perspective with the downturn in the economy. That’s been reflected in the Life Index over the past four or five years. Also, buyer behavior in this group

Oliphant: With the increases that we’ve seen in eight or nine months and have certainly seen in the past couple of months, it’s a little bit too short a timeframe to make a prediction. But I think that we can attribute some of the increases to the consumer sentiment or confidence level rising 30 points since October. It represents the biggest, fourmonth increase of any time over the past three decades. So, I think that there is certainly an increasing level of confidence in the economy. That manifests itself in multiple ways, whether it is the financial markets or even the activity level for insurance.

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