U.S. insurers protected 1% more workers against long-term disabilities in 2003 than in 2002, and 3% more workers against short-term disabilities.
In its latest group disability market survey, JHA Inc., the Portland, Maine, disability risk management and consulting firm, found that premium revenue from new sales of short-term and long-term group disability insurance increased 8%, to $1.9 billion, and that premium revenue from group disability policies already in force rose 6%, to about $10 billion.
Premium revenue from policies already in force grew at roughly the same rate for STD and LTD policies, but insurers had better luck at signing up new STD customers than new LTD customers. New STD sales rose 11%, while new LTD sales grew only 6%, JHA says.
The survey covers results for 37 insurers.
The 2003 group disability growth figures are stronger than the 2002 growth figures. In 2002, group disability premium revenue increased just 5% and new sales crept up 1%.
But “the industry continues to face challenges in [its] effort to increase the number of employers offering group disability coverage to their employees,” Drew King, JHAs president, says in a statement about the survey results. JHA is a unit of General Re Life Corp., Stamford, Conn.
The 2003 survey covers topics such as lapse rates and voluntary, employee-paid disability sales programs as well as traditional group disability program premium revenue.
The 2003 lapse rate for STD cases was about 18% and for LTD cases was about 16%, JHA says.
On the voluntary side, carriers reported dramatic increases in in-force coverage levels but only a modest increase in sales of voluntary STD coverage.
Premium revenue increased 15% for in-force, voluntary STD policies, to $272 million, and 23% for in-force, voluntary LTD policies, to $579 million.
Premium revenue from new sales of voluntary LTD policies soared 29%, to $151 million. But premium revenue from new sales of voluntary STD policies actually fell 1%, to $65 million, JHA says.
The total number of employees insured increased 17% for voluntary LTD programs but only 4% for voluntary STD programs, JHA says.
Reproduced from National Underwriter Edition, May 7, 2004. Copyright 2004 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.