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Group disability insurers see 13.8% increase in new sales in 2016

Insurance Forums Staff

Combined short-term disability (STD) and long-term disability (LTD) premium from new sales totaled $2.3 billion in 2016, up from $2 billion the year before – a combined increase of 13.8% in new sales according to Milliman’s recently released 2016 U.S. Group Disability Market Survey.

STD new sales premiums saw a 12% increase, while LTD new sales premiums increased by 15%.

Milliman’s comprehensive report analyzes the employer- and employee-paid STD and LTD markets, including insurance products, sales, and in-force business.

In total, 20 disability insurers contributed data to the survey, which also provides analysis of premiums, cases, and covered lives in 2015 and 2016 for all participating companies. New features this year include expanded case size metrics and employer-paid vs. employee-paid data, new information on first-time buyer business, as well as LTD churn and statutory STD metrics. The report also ranks participating companies by both STD and LTD in-force premium totals.

Other key survey highlights

• Combined STD and LTD in-force premium for participants was $14.4 billion in 2016, compared with 13.6 billion in 2015. This is estimated to be 85% to 90% of the group disability market in terms of in-force business.

• Average STD premium per life increased by 2.2% for in-force business, while declining by 3.1% for new sales; average LTD premium per life increased by 2.7% for in-force business and by 1.1% for new sales.

• The reported number of LTD cases sold increased 6.9% while the number of LTD cases in-force only increased slightly from 2015 to 2016. Both the total LTD premium and the number of LTD covered lives from new sales increased significantly with more modest increases in in-force values.

• For STD, the reported number of cases sold decreased by 5.0% from 2015 to 2016 with a similar decrease in the number of cases in-force. However, STD premium and covered lives from new sales show a similar pattern to LTD – large increases in new sales with more modest increases in in-force values. This implies an increase in the average lives per STD case from 2015 to 2016.

The 20 disability insurance companies that contributed data to the survey include: Aetna, Cigna, Dearborn National, Guardian Life Insurance Co., The Hartford, Liberty Mutual, Lincoln Financial Group, MetLife, Mutual of Omaha, Prudential, The Standard, Sun Life Financial, Symetra, Trustmark Insurance, The Union Labor Life Insurance Co., UnitedHealthcare, Unum, USAble Life and Zurich North America Life.

Copies of the full report are only available to participating companies. For a summary of results, visit http://us.milliman.com/insight/2017/Summary-of-key-results-from-2016-U_S_-Group-Disability-Market-Survey/.

About Milliman: Milliman is among the world’s largest providers of actuarial and related products and services. The firm has consulting practices in healthcare, property & casualty insurance, life insurance and financial services, and employee benefits. Founded in 1947, Portland, Maine-basedMilliman is an independent firm with offices in major cities around the globe. For further information, visit milliman.com.



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