The 2013 U.S. Critical Illness Insurance Market Survey
October 17, 2013| By Steve Rowley |
Gen Re has just released the results of the 2013 Critical Illness Market Survey. We have been conducting surveys of the U.S. Critical Illness Insurance (CII) market since 2000 and conducting them in conjunction with the National Association for Critical Illness Insurance (NACII) since 2006. These reports have provided participating companies with the most detailed insight available into the CII market. Over the years, we have greatly expanded the survey, based on feedback and requests from participating carriers. Today, the survey gathers important information from companies active in the CII market, as well as those who are exploring it as a new product offering.
The 2013 U.S. Critical Illness Market Survey (covering 2012 issues) provides comprehensive information on plan design, underwriting, claims and product performance. While complete results are only made available to participating companies, this blog outlines some of the key findings. As with all surveys, caution should be used when comparing year-to-year results because different companies may participate each year.
We are pleased to report a record number of participants in this year’s survey. Responses were received from 57 companies (40 of whom distribute CII), and they reported on 76 product variations in addition to another 22 products that are in development. Seventeen companies who are not active in marketing CII responded, indicating they were looking at developing a product, up slightly from the 15 who responded similarly last year. We believe that the combined results of the Gen Re/NACII study represent approximately 95% of the U.S. CII market today.
Participants reported $308 million in new premium sales for the year 2012. This represents an astounding 90% increase over reported 2011 sales figures. Whereas some of this was the result of new entrants to Critical Illness Insurance, year-over-year premium growth for carriers that participated in both surveys averaged 36%.
Last year we outlined our concern that True Group rates were trending downward. Unfortunately, that trend continued this year and now shows a 63% decline in the past four years while at the same time products have become richer than ever. These trends are not occurring in the Traditional Individual or Worksite Individual markets.
As for product performance, when asked if sales, profitability, agent acceptance, and consumer demand exceeded, met, or missed their expectations, the results were favorable. Traditional Individual and True Group reported an increase in “exceeded” across all four areas. Worksite Individual generally reported more “met” expectations with fewer “exceeded” or “missed.” This is likely a result of the relative maturity of that market segment. Interestingly, while all three market segments anticipate strong growth over the next two to five years, a handful of Worksite Individual carriers believe that their segment is likely to contract.
Perhaps one of the more telling portions of the survey was from carriers considering the development of a Critical Illness Insurance product. In 2010 consumer demand was cited by only 13% and agent demand by only 30%, today those numbers have risen to 64% and 73% respectively - clearly a positive sign that Critical Illness is on its way to becoming mainstream.
If you would like to participate in the 2014 Critical Illness Insurance Market Survey and gain access to the complete report, please contact Steve Rowley at firstname.lastname@example.org.