More than four in 10 carriers of life insurance with voluntary accidental death and dismemberment coverage rate their AD&D policies as a very profitable product line, according to new research.
Eastbridge Consulting Group Inc., Avon, Conn., disclosed this finding in a summary of results from a new study, “2012 Frontline Report,” which covers worksite and voluntary product trends. Eastbridge conducts the survey every two years.
The study reveals that 43% of the respondents selecting voluntary AD&D products as a ‘very profitable’ product line. Universal life/whole life was ranked second (with 41%) followed by term life (with 26%).
“Although these products received the highest percentage rating them as very profitable, most carriers surveyed actually classified their products as having average profitability,” says Eastbridge Vice President Bonnie Brazzell. “Fewer companies ranked any product as ‘very profitable’ this year.” “This year saw major swings in several lines,” adds Eastbridge President Gil Lowerre. “As an example, fewer companies chose long-term disability, cancer, and hospital indemnity as very profitable, causing them to fall out of the list of very profitable products.”
Voluntary products rated most frequently as ‘unprofitable” by the survey participants included dental, vision, and critical illness insurance.
“This is somewhat surprising considering that critical illness was ranked first by the survey respondents in terms of growth products in the next two to three years,” says Lowerre. “What’s more, both dental and critical illness had the highest growth rate—22% and 20%, respectively—this past year.”