Individual Disability in the U.S. - Behind the Numbers

July 28, 2020| By Steve Woods

Gen Re recently released the results of our annual U.S. Individual Disability Market Survey. Overall, 2019 was not a great year from a sales perspective; however, if you look beyond the sales numbers there were some very positive results in certain segments of the business. The most prominent being claims results for in force blocks of business.

The 16 company survey cohort posted an increase of 0.7% in total in-force premium to $4.9B in 2019 and a similar increase in total new sales to $426.3M. The results include Non-Cancelable (Non-Can), Guaranteed Renewable (GR) and Buy-Sell products.

Non-Can in-force premium increased slightly (0.6%) to almost $4.1B in 2019, accounting for 85% of total in-force premium, while GR in-force premium grew 1.9% to $664.5M. Buy-Sell in-force premium has been trending downward since 2009 and fell a further 2.6% to $56.5M last year.

Non-Can and Buy-Sell new sales premium grew 1.7% and 0.4%, respectively, while new sales premium for GR declined 3.8%. Overall, total new policies declined 5.9%. By product line, Non-Can policies fell 3.9%, GR fell 8.7% and Buy-Sell policies were down 6.3%. Meanwhile, total in-force policies decreased 1.1%.

Yet although the industry’s 2019 performance was flat overall, 50% of responding companies (eight) said sales had actually exceeded their stated 2019 goal. Of the remaining eight companies, three reported meeting their goals.

Many companies that reported exceeding their sales goals said that the main driver was strong Guaranteed Standard Issue (GSI) results. So even with a flat market, most companies continue to experience positive results. Almost 90% of the companies responding to our survey stated their 2019 claims experience either met or exceeded their plan.

Our survey questions brought out some interesting background to those comments:

This year, COVID-19 has presented unique challenges that no insurance company has dealt with in the past. We believe that the Individual Disability market will continue to evolve and make the appropriate decisions to address not just these unique times but to position the market for profitable growth in the years to come. As always, Gen Re is ready to support you in any way we can.

For more details on the U.S. Individual Disability Market Survey, you can read our summary report.

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