Boomers Continue to Boost the Medicare Supplement Market
October 18, 2017| By Marissa Valente |
Region: North America
Today 57 million people in the U.S. are on Medicare and that number continues to grow daily due to the aging Boomer population.1
This translates into an opportunity for insurance carriers looking to expand their business in the senior market.
Results from our recently released annual Medicare Supplement Market Survey affirm this opportunity. Of the companies represented in the survey (81 this year, representing 75% of the market), more than half saw year-over-year sales growth in 2016, and 48% experienced double-digit growth over 2015.
Additional Highlights From the 2017 Survey
- On an aggregate basis, participating companies reported $21.7 billion of in-force premium for 2016 (a growth rate of 7.4%). The growth rate improves to 8.2% when focusing only on those companies that were actively selling.
- Annualized sales premium continues to grow: Sales premium growth rate this year was 6.9%. (Exhibit A)
- Although Plan F continues to be the most dominant plan sold, Plan G is increasing in popularity, representing 25% of premium sold and 27% of lives sold in 2016. (Exhibit B)
- Average lapse rates remained consistent in 2016 at 10.9%.
Exhibit A. Annualized Sales Growth* Rates for Active Companies
*The growth rates for both sales and in-force are based on this year’s participating companies that reported premium and lives for both 2015 and 2016.
Exhibit B. 2016 Sales Premium and Lives by Plan Type
Our full survey captures Medicare Supplement results and market trends for participating companies (both active and closed block). The report examines sales and in-force numbers, claims trends, underwriting tools and practices, rate increase activity, as well as movement across distribution channels. Although the full report is only available to the companies represented in the survey, a high-level summary is available to the public.
Gen Re is committed to working with companies seeking opportunities in the Medicare Supplement market, as well as those who need help with their existing Medicare Supplement business. If you are a Medicare Supplement carrier either actively selling or holding a closed block, let us know if you'd like to participate in next year's survey. If you have questions about the results or other research offerings, we'd also like to hear from you.
- “Medicare Advantage.” Kaiser Family Foundation, October 10, 2017.