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Life Health > Life Insurance

Group LTD Outpaces Group STD

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Group disability insurers had better luck with long-term coverage than with short-term coverage in 2004.

In a year when job growth was sluggish and big increases in health insurance rates devoured employers’ benefits budgets, overall U.S. group long-term disability insurance enrollment increased 5%, to 36 million, according to JHA, Portland, Maine, a disability reinsurance, consulting and research firm that is a unit of General Re Life Corp., Stamford, Conn.

Overall group LTD enrollment rose even though the average cost of LTD coverage per life increased 2% both for new policies and policies already in force, JHA says.

Although revenue from new LTD sales plateaued at $1.3 billion, premium revenue from in-force LTD policies increased 7%, to $7.8 billion.

Performance was weaker on the STD side of the market.

Revenue from new group STD sales fell 4%, to $590 million, and premium revenue from group STD policies already in force rose only 5%, to $2.8 billion. The number of U.S. workers covered by in-force group STD policies held steady at 15 million.

“Group disability sales were mixed,” says JHA President Drew King.

The 2004 JHA survey attracted 36 participants, and JHA researchers found that the carriers with the 10 biggest group disability operations grew faster than the carriers with smaller disability operations.

The top 10 group STD sellers increased their share of reported group STD sales revenue to 77% in 2004, from 75% in 2003.

The 10 group LTD sellers pumped their share of reported group LTD sales revenue up to 82% in 2004, from 75%.


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