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Critical Illness Insurance and "The Road Less Traveled"

January 14, 2016| By Steve Rowley | Critical Illness | English

Region: North America

In The Road Not Taken, Robert Frost muses “Two roads diverged in a wood, and I – / I took the one less traveled by, / And that has made all the difference.” We’ve all heard this story told a hundred different ways throughout our lives. Whether by our mothers advising us not to “follow the herd,” our teachers warning us of the risks inherent in taking too many “shortcuts,” or our employers urging us to “think outside the box” - we’ve been encouraged to display courage and boldness in the choices we make rather than simply do what is popular.

Perhaps these sayings have become so cliché that we no longer hear them or heed their advice. This can be said of advice in business as well. Nowhere is this more apparent than in the rapidly growing Critical Illness Insurance market, where it would not be unusual for carriers to look at the chart below from our 2015 U.S. Critical Illness Market Survey and quickly assess that they should follow the herd into the Group and Worksite segments of the market as they represent 84% of new business sales premium.

Whereas this initial impulse is easily understandable, and does recognize a market opportunity, a deeper dive into our historical data suggests that greater opportunity may lie elsewhere.

While companies come in and out of our Market Survey, we have seen an increase in the number of companies selling CI. Conducting a rough comparison to our 2011 Market Survey, it appears the growth in companies selling is greatest in the group and worksite area. Our 2011 Market Survey included 26 companies while our 2015 Market Survey included 35 actively selling group and worksite products. In comparison, we had 10 companies that reported actively selling traditional individual in 2011 versus 14 in 2015. Again, these figures only include those companies participating in our Market Survey but are consistent with what we have been hearing in the market.

Despite this 35% increase in the number of carriers in the group and worksite space, their share of those markets has diminished from 87% to 84%, while the traditional individual market grew from 13% to 16%.

This prompts questions:

  • Is there still opportunity in the Critical Illness market? Absolutely!
  • Will growth likely continue on both the traditional individual and group/worksite segments? Without a doubt!
  • Would it be best to compete with the 13 carriers who are growing their market share of traditional individual or with the 35 carriers fighting for their share of the group and worksite opportunities? We’ll leave that decision to you!

Regardless of which decision a carrier makes, it is important to understand that the consumer need for Critical Illness insurance is greater than ever.


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