It’s hard to believe that not only are we drawing close to the end of another year, but also closing in on the end of the first decade of the Third Millennium. 

(I already expect to hear from pedants and calendar officials informing me that in strict terms a decade goes from a year beginning with the number one, not zero.  Then I expect to hear from some people telling me that zero is not a number.  But most of you will know what I mean, and the others will just have to deal with it.)

(By the way, these same folks are very likely the ones who are still preoccupied with what to call the decade now about to end.  My own suggestion (considering the tenor of most of those 10 years) would be the Naughties.)

In any case (and to get back to life outside the parentheses) it’s been quite a year, hasn’t it?  

For many people it will be the equivalent of Queen Elizabeth II’s annus horribilis, 1992, and not because two of their sons’ marriages went bust and one of their castles caught on fire, to cite some of the royal disasters of that year that caused Her Majesty so much distress.

Rather many will remember 2009 as a horrible year because of more mundane reasons. They lost their job and couldn’t find another one.  Or their house (castle) went into foreclosure.  Or their retirement funds, once so safely (or so it seemed) parked in a 401(k) had managed to recoup only a small percentage of the 40% or 50% they had lost when the market went into free fall. Or because they were in sales (including insurance products, of course) and every day was more of an uphill climb than it usually is due to the fact that consumers all over the place were holding on to (not to mention squeezing hard) their depleted shekels.

And on that subject, the first six months of 2009 will be (bitterly) remembered as the time when sales of insurance products saw their steepest decline in nearly 70 years, according to LIMRA International.

Things may have started to pick up in a couple of lines, however.  So, in a time when looking for good news is the equivalent of grasping for straws, then the uptick in whole life sales (which account for a thin sliver of the market) is something worth celebrating.

We could also, I suppose, take cheer from the fact that economists are declaring that the recession officially over.  But the response of many non-economists to that claim is: Really?

The danger in trumpeting the macro view in something like this is that it stretches the disconnect between what people feel in the own lives and what they hear from those who see the “big picture” or who have a stake in pushing the rose-colored view of things that the macro view encourages.  (President Obama, take note.)

Needless to say, the widespread pain has made sales of insurance products ever so much more difficult.  The ‘intangible’ thing combined with the depletion of discretionary income has taken a toll on producers and companies alike.

All of which makes it imperative for both producers and companies to keep plugging away and using this time of trouble to reinforce the message of the security that insurance products provide.  Even if sales of those products come later.  

The reality is that these tough times will pass, although not as quickly as we would surely like.  But if producers and companies don’t stay on message now, they will have to compete with a myriad of consumer preoccupations later on (like looking for the best HDTV).

So many consumers are still very scared and want to hear about security. And that’s whether they can pay for it now or not.

The headline above describes how I feel about the glimmers of “evidence” being put forth by some economists and commentators that the Great Recession is starting to wind down and could be history by year-end.
All these signs that are noted as signs of hope are on the macroeconomic level, however. And while, literally, it may be true that two consecutive quarters of GDP growth mean we’re out of the recessionary woods, in this case the macro signals mean squat.
Flash to the ivory tower: The recession is very much alive at the micro level.
It just goes to show that you can use statistics to prove anything you want.
This is also playing out in the great debate over healthcare reform where the same statistics are often used to reach opposite conclusions.
Thus, one faction will emphasize that 85% of the population is covered by health insurance and there is no need—pressing or otherwise–to change a system where so many are covered.
The other side will respond with the fact that 15% of the population is around 47 million people who aren’t covered and that this kind of situation is untenable in a country like ours.
The response to this–and believe me I know because any time I mention the 47 million I get the same response—is that of course there are not 47 million people uninsured and that once you take out the illegal immigrants, the young people who can’t afford health insurance, the rich people who won’t buy health insurance and other assorted groups, you are left with around 2 or 3 million who are really uninsured.
(I didn’t really intend to get into the healthcare reform quagmire in this piece, but there’s no avoiding it, it seems.)
In any case, one set of statistics that doesn’t lie came out from LIMRA International the other day and had to do with individual life sales in the first six months of this year. They would seem to provide pretty strong proof that the recession still has quite a way to go.
The headline of LIMRA’s release read in part: “Steepest Six Month Drop in Individual Life Insurance Sales in Almost 70 Years…”
Yes, Virginia, that means since 1942.
Individual life annualized premiums were down 23% in the six months, with some product lines down considerably more than that. You don’t have to be Sherlock Holmes to come to the conclusion that variable life and variable universal life are down the most, some 72% and 55%, respectively, for the six months.
Other product lines, while not so depressingly bad were still off year to date.
The rest of LIMRA’s release headline read: “…But Results Improve Slightly from First Quarter.” The evidence for this is that the falloff in the second quarter was less than in the first.
What the figures show me, however, is that there is still too much pain and suffering out there for one to conclude that the recession will be over soon.
It’s not only consumers who are suffering (and thereby holding off purchasing life insurance), but obviously companies are feeling the pain and agents are getting their share too. This pain has enormous ripples throughout our economy as vendors, media and other service providers feel the pinch.
I’d love to believe the glimmers of evidence economists see are more than fool’s gold, but those sparkles just don’t look real.

That things are bad is no secret.  But every once in a while, as we slog through this meltdown, a statistic or set of data just pops out and reminds you that no matter how bad you thought things were, they’re worse.

What did it for me this week was reading through LIMRA International’s release on first quarter sales figures of the spectrum of life insurance products.

Even old-timers might have a hard time remembering when sales took such a nosedive, since as LIMRA’s CEO Bob Kerzner remarked, “…the last time quarterly sales dropped this much was in 1943.”  (And if you’re one of those who can sit around the cracker barrel and reminisce, “If you think this is bad, sonny, you should have been around in the summer of ‘43…”, well, all the more power to you.)

Overall, LIMRA reports, premium from individual life sales dropped, slid, plunged, plummeted, nosedived (take your pick) an amazing 26% from the year before.

Every product line was hit, LIMRA says, with variable life premium off a massive 61%.   Universal life, down 33%.  Variable UL, off 61%. 

The only two lines that didn’t enter double-digit loss territory were term (off  4%) and whole life (down 5%).

Additionally, totals for face amount and number of policies sold were off 8% in both cases.

These stats alone show how much people are hurting and how far down on the totem pole life insurance (unfortunately) sits when filling your stomach, keeping the roof over your head or the repo guys at bay are more important and pressing than what’s going to happen if you die.  Some of these people, after all, feel like they’re dying every day.