US Group Disability Market Survey analyzes new sales and in-force business for 2016
Actuarial firm Milliman in June 2017 released a white paper: The 2016 US Group Disability Market Survey, which discusses employer-paid and employee-paid short-term disability (STD) and long-term disability (LTD) insurance products, and includes an analysis of premiums, cases, and covered lives from new sales and in-force business in 2015 and 2016.
The white paper determined that the combined STD and LTD in-force premium among contributing companies in 2016 was $14.4 billion, versus $13.6 billion in 2015, and represents 85-90% of the group disability insurance market in terms of in-force business. STD in-force premium increased by 6.4% in 2016, and LTD in-force premium increased by 5.1%. (Figure 1)
Combined STD and LTD premium from new sales was $2.3 billion in 2016 versus $2.0 billion in 2015. STD premium from new sales increased by 12.0% from 2015-2016, and LTD premium from new sales increased by 14.9%. (Figure 2)
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.
The reported number of STD cases sold decreased by 6.0% from 2015-2016, with a similar decrease in the number of cases in-force. STD and covered lives from new sales, however, show a pattern similar to LTD with large increases in new sales along with more modest increases in in-force values.
Average LTD premium per life grew slightly, for both in-force business and new sales, while average STD premium per life increased by 2.2% for in-force business but declined by 3.1% in new sales. (Figure 3)
LTD cases sold increased 6.9%, while the number of LTD cases in-forced only increased slightly. 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. STD number of cases sold decreased by 5.0%, with a similar decrease in the number of cases in-force. (Figure 4)
The white paper also highlights specific in-force premiums ranked by company.
Twenty insurance companies contributed data to the survey, including Aetna, Cigna, Dearborn National, Guardian Life Insurance Company, The Hartford, Liberty Mutual, MetLife, Mutual of Omaha, Prudential, and others.