The great recession hit new U.S. group short-term disability and long-term disability insurance sales hard in the first half of the year.
Premiums from new sales of group short-term disability (STD) insurance fell to $379 million during the first half, down 8% from the total for the first half of 2009, and premiums from new sales of group long-term disability (LTD) insurance fell to $739 million, down 21%.
Earned premium revenue from in-force cases fell 2% in the LTD market, to $4.9 billion, and 1% in the STD market, to $1.7 billion.
The total number of employers with LTD coverage held steady, and the number with STD coverage increased 2%, but the number of employees covered fell 2% for both types of plans, JHA says.
Researchers at JHA, Portland, Maine, the disability and group life reinsurance division of General Re Life Corp., Stamford, Conn., have published those figures in a summary of results from a survey of 27 disability insurance carriers. JHA also has published a separate report on the group life market.
The drop in the number of employees covered may be a “reflection of rising unemployment and increased layoffs,” and pressure related to the Affordable Care Act may also be playing a role, JHA says.
The voluntary disability insurance market has shown healthy growth in recent years. Earned premiums from voluntary STD coverage increased 2% in the first half, to $359 million, but voluntary LTD earned premium fell 4%, to $672.
“On a more positive note, there are signs that persistency may be showing some signs of improvement,” JHA says.