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BOLI Market Update for Q1 2022

Jun 02, 2022

Last year was an extraordinary one for bank-owned life insurance (BOLI) purchases, with banks of all sizes placing new premiums totaling just under $10 billion* in 2021, with many of these banks being first-time BOLI purchasers. Continuing with a theme consistent since the financial crisis, approximately 95% of premium placed in 2021 was allocated to general account product. When finalized, Newport expects Q1 2022 data to show continued strong demand for BOLI. 

With the significant run-up in interest rates over the first few months of 2022, BOLI net yields have also increased. Depending on factors including size of purchase and tax rate assumptions, first year taxable equivalent yields of 5.0% or higher are achievable. Many banks have taken advantage of these yield increases and funded new BOLI placements. If interest rates continue to rise from current levels, we may see a shift to products offering a new money crediting rate. This could potentially include stable value wrapped separate account products, which have been ignored by the market since the financial crisis. 

Newport works with all major BOLI carriers and all product types. The depth of carriers and products we service coupled with our tenured staff uniquely positions Newport as the industry’s go-to BOLI provider. If you have any questions regarding Newport’s BOLI offerings, please contact Scott Bethune at 336-369-2270 or Justin Robertson at 336-369-2275. 

* Source: BOLITracker

This material has been prepared for informational purposes only. It is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Consult your own tax, legal and accounting advisors before making any decisions. Newport and its affiliates do not provide tax, legal or accounting advice.

Newport Group, Inc. and its affiliates provide recordkeeping, plan administration, trust and custody, consulting, fiduciary consulting, insurance, and brokerage services. Securities are offered through Newport Group Securities, Inc., a dually registered investment advisor and broker dealer, member FINRA and affiliate of Newport Group, Inc. Securities in California are offered through Newport Securities Insurance Services. For more information on Newport Group Securities, Inc. or Newport Securities Insurance Services and services offered, please visit our website at www.newportgroup.com. 20220526-2216789

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Newport Group, Inc. and its affiliates provide recordkeeping, plan administration, trust and custody, consulting, fiduciary consulting, insurance and brokerage services. 

Investment Advisory and fiduciary consulting services are offered through Newport Group Consulting, LLC, a registered investment adviser. Securities are offered through Newport Group Securities, Inc., a dually-registered investment advisor and broker dealer, member FINRA. Securities in California are offered through Newport Securities Insurance Services. For more information about Newport Group Consulting and its services, Newport Group Securities, Inc. or Newport Securities Insurance Services and services offered, please refer to our Form ADV Part 2, which is available by contacting us at 407-333-2905, visit our website at www.newportgroup.com, or advisorinfo.sec.gov.  

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Newport Group Consulting, LLC, Newport Group Securities, Inc., and Newport Trust Company are subsidiaries of Newport Group, Inc., an Ascensus Company.