LIMRA: Group Premiums Grew In Difficult Year For Employers

In-force premium for United States group life, disability and long term care insurance all increased in 2001, according to reports from LIMRA International.

This is a sign of strength of commitment to offering benefits among employers that are dealing with economic challenges, contends the Windsor, Conn. insurance research association.

In-force premiums for group disability were up 5% and for group life, 7%, LIMRA says.

But the strongest performance came in LTC insurance. Here the industry saw in-force gains of 16% in premiums, 17% in employer-sponsored groups, and 14% in participants, LIMRA says.

“These results should be encouraging to group writers,” given that the year 2001 saw rising unemployment and significant economic uncertainty, says Anita Potter, manager of group research.

Going forward, she adds, “the outlook is positive. With continuing high health care inflation, voluntary benefits have become an important part of current employer benefit strategies.”

New group life and disability premiums also grew, LIMRA points out, but says much of the activity in 2001 reflected movement of existing employer contracts, rather than new business.

Specifically, group life premiums were up 13% compared with 2000, and new group disability premiums grew 7%.

Meanwhile, the number of new employer-sponsored LTC insurance groups grew
10%, LIMRA says. But new LTC participants fell 1% and premiums were off by 6%. The top five issuers of employer-sponsored group LTC insurance accounted for 81% of total in-force premium in 2001, notes Jennifer Douglas, project director of the group LTC survey.

Group term life insurance saw a 27% increase in face amount, a 3% increase in certificates, and a 7% decrease in master contracts.

As for permanent group life insurance, premiums increased 15%, face amount decreased 15%, certificates increased 11%, and master contracts fell 17%.

Turning to total group disability, LIMRA says sales here, including both fully insured and administrative services only plans, based on annualized premiums, grew 7% compared with 2000.

The short-term disability sales posted strong gains: fully insured premiums were up 12% while ASO sales increased 18%. Long-term disability fully insured sales increased 3% while long-term ASO sales declined 26%.

In-force premiums posted moderate to strong gains across the board with
the exception of long term ASO, which fell 10%. Total long-term disability premiums rose 3%, and short-term disability gained 9%.

Finally, a joint dental plan report from LIMRA and the National Association of Dental Plans says total new group dental sales rose 3% in 2001, based on subscribers.


Reproduced from National Underwriter Life & Health/Financial Services Edition, May 13, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.