New annualized premium for workplace life insurance, disability insurance, and supplemental health products increased in the second quarter, according to LIMRA’s workplace benefits sales surveys.

“After a sluggish first quarter, sales for workplace life and disability insurance products experienced solid growth in the second quarter,” said Patrick Leary, corporate vice president, and director of LIMRA workplace benefits research. “Despite inflationary concerns, the awareness among employees of the need for insurance coverage remains even after their concerns about COVID-19 have waned, which helps explain the continued growth in certain voluntary products.”

LIMRA estimates 86 million employees could have access to new insurance benefits within 2 years

Facing a historically tight job market, many employers are looking to bolster their workplace benefits to attract new talent and retain their existing workforce. In a LIMRA survey of U.S. private employers with 10 or more employees, 60% said they are considering adding a new insurance benefit within the next two years ― roughly double the interest employers expressed five years ago.

Total U.S. annuity sales increased 16% to $79.4 billion in the second quarter, according to LIMRA’s U.S. Individual Annuity Sales Survey. Fixed-rate deferred (FRD) and registered index-linked (RILA) sales reached an all-time record for the quarter, while fixed index annuity sales fell just short of a record quarter.

“All fixed products showed positive growth as consumers looked for safety from the volatile equity markets,” said Todd Giesing, assistant vice president, LIMRA Annuity Research. “With average yields at or above 3% for fixed-rate deferred annuities, it’s a rate environment we haven’t seen in a long time.”

Total new premium for individual life combination products increased 22% to $4.3 billion, compared with prior year results, and down slightly from the $4.8 billion in premium generated in 2019, according to LIMRA’s 2021 U.S. Individual Life Combination Products Annual Review. Combination products represented 20% of total life insurance premium in 2021.

Total U.S. annuity sales increased 22% to $77.5 billion in the second quarter, according to preliminary results from LIMRA’s U.S. Individual Annuity Sales Survey. This marks the highest quarterly sales ever recorded since LIMRA began tracking annuity sales and nearly $9 billion above the previous record set in the fourth quarter of 2008 during the Great Recession.

In today’s tight job market, companies are focused on how to differentiate themselves to attract and retain the best talent. There has been a lot of attention on salaries and hybrid work arrangements but how do employee benefits figure into the equation?

New annualized premium for supplemental health insurance products, (collectively accident, critical illness, cancer, hospital indemnity, and other supplemental health insurance products) increased 6% in the first quarter of 2022 year-over-year. During the same period, new annualized premiums for workplace life insurance and disability insurance fell, according to LIMRA’s workplace benefits sales surveys.

Despite the continued challenges resulting from the COVID-19 pandemic, the annuity industry rebounded strongly — with the first quarter of 2022 seeing total U.S. annuity sales increase 4% to $63.3 billion. LIMRA expects this momentum to continue through the next several years.

“The outlook for rising interest rates and fairly level equity markets will have investors continuing to look for the balance between protection, growth, and guaranteed income, creating a strong potential for individual annuity sales to break the all-time record levels of sales experienced in 2008,” says Todd Giesing, assistant vice president, LIMRA Annuity Research.

With the onset of the pandemic, workers became increasingly concerned about their financial security and emotional and physical well-being. According to a new study by LIMRA and EY, there is a growing employee appreciation for non-medical benefits such as paid family medical leave, life insurance, disability insurance, and wellness programs. The study predicts this increased demand, combined with the fierce competition for top talent, will drive non-medical workplace benefits to grow 20% by 2026.

COVID-19 raised consumers’ awareness about the importance of life insurance. According to LIMRA research, half of U.S. workers believe their life insurance benefit is more important due to COVID-19. To ensure every worker who has access to life insurance at their workplace opts in, our industry needs to expand efforts to educate employers about the value their workers place on life insurance and encourage them to highlight this important benefit during their next open enrollment.