Whether you know it or not, the disability insurance market is having a good week.
More than 150 of the industry’s best and brightest have converged on Denver for the International DI Society’s eighth annual conference, where a strong program and a networking-friendly atmosphere are helping to educate and motivate the movers and shakers of this niche market. The conference runs through Tuesday with seven general sessions, eight breakout sessions and a “Speed DI” session that closes out the event.
The International DI Society knows it is not NAIFA, nor does it need to be. The self-proclaimed “boutique” association has modest and realistic goals, as I learned in speaking with the society’s President Rick Cordaro, DIA, LUTCF, and executive directors Susan Johnson and Piera Pickett during the conference’s first full day on Sunday. The society, which has a stable membership of around 300 (and around 65% typically attend the annual conference), is certainly looking to grow and spread its sphere of influence as a beacon of the DI industry. But what the society would really like to see is more active, independent producers among its membership, which seems fairly evenly split between insurance company executives, marketing firms and agency heads, and producers. The society is actively working to promote the benefits of becoming a member and attending the annual conference, as well as opening up channels of communication between members with newer tools, such as LinkedIn discussion groups.
As with any market, the DI industry certainly has its challenges. As actuary Bob Beal, FSA, MAAA, told conference attendees on Sunday, there are few producers selling individual disability insurance (IDI) and far fewer companies offering IDI products than there used to be. The vast majority are chasing “4A+” occupations — primarily doctors, other medical professionals and high-end executives. Beal said more than 80% of new premium is sold to 4A+ occupations, and that market figures to remain solid because it doesn’t matter what you charge — doctors will buy it because they need DI coverage more than anyone to protect their income. But Beal also mentioned that the typical IDI product still seems too expensive and sophisticated for the middle market and the blue collar market.
He said the key to future growth is distribution training and support, but only a few carriers seem to be seriously investing in these areas. He also mentioned that today’s issues pale in comparison to the problems the industry faced in the 1990s, when the number of carriers underwriting disability insurance dropped from a one-time high of 545 to only 36 by the turn of the century.
It was at a DI Day Sales Conference in Minneapolis in 2001 that consulting firm Milliman USA released the results of its actuarial study of disability insurance results for the period of 1975-2000, including findings about the exit of most carriers from the business. A white paper, “The State of Disability Insurance in America – 2002,” created alarm and stimulated interest that evolved the concept of forming an organization to revitalize the disability insurance industry. The International DI Society was formed in 2005 and staged its first annual conference in October of that year.