Disability insurers need to communicate better with consumers and brokers or face a bleak future.
Speakers delivered that message here at the latest yearly disability insurance seminar sponsored by JHA, Portland, Maine.
Today, “it’s too difficult to go to market” with disability products, said Edward O’Malley, a senior vice president in the benefits unit at National Financial Partners Corp., New York, a large financial services distributor, during the first seminar general session. “It’s got to be simpler.”
The overall mood at the JHA seminar was cautiously optimistic, many participants agreed. The 2006 seminar attracted 350 participants, up from 289 in 2005. JHA, a disability insurance consulting and reinsurance firm, is reporting that disability sales are holding their own and that profits are increasing.
In the past year, disability insurers have started the Council of Disability Insurers, Portland, Maine, a disability insurance awareness group, and brokers and others have started the International DI Society, Seal Beach, Calif., a group that is trying to improve communication between all players in the disability insurance market.
The JHA seminar traditionally has appealed mainly to disability insurance company executives, but W. Harold Petersen, a well-known Valencia, Calif., disability insurance broker who serves as president of the International DI Society, appeared at the 2006 seminar to promote the society, and a number of other brokers and consultants also attended.
One of the brokers in the crowd was Glenn Dorr, a vice president at HCC Specialty Underwriters, Boston, who brokers disability coverage for entertainers, executives and other individuals who need unusually large amounts of disability coverage.
The players in the disability market seem to be excited about the market, Dorr said in an interview at the seminar.
Although client and broker awareness of the kind of coverage Dorr brokers is lower than Dorr would like, “it’s trending in the right direction,” Dorr said.
But other brokers and consultants in attendance talked about running into employers who are reacting to skyrocketing health insurance rates by cutting employer-paid disability programs.
JHA President Drew King warned during his introductory speech against just accepting modest increases in profitability.
“We’re not getting there fast enough,” King said, noting that companies need to generate high returns on disability insurance operations because the operations require large amounts of capital.