Opportunity Is Knocking - Will You Answer?
Gen Re has just completed our 16th annual U.S. Critical Illness Market Survey. The data gathered from 53 participating carriers captures a moment-in-time snapshot of where the market is today. This snapshot comes to life when we look to the historical results from the last 15 years in an attempt to predict the future. Having just completed this process, a single word comes to mind: Opportunity.
The word opportunity has been defined as: 1) a favorable juncture of circumstances, and 2) a good chance for advancement or progress. Let's look at the results and observations from our 2017 Critical Illness market survey and research, and then we can see whether the market fits the definition of opportunity.
- Market Growth - The Critical Illness insurance market continues to enjoy double-digit growth. Our survey results show an industry increase in new business premium of just over 10% from $432.2 million in 2015 to $476.4 million in 2016. When we compare only the carriers who participated and shared data for the past two survey years, we see stronger growth - a 17% increase in new business premium for the same period.
- Market Outlook - When asked what their targeted annual sales growth is for the next three years, more than half of the respondents reported targets above 10%, while 28% of them expect greater than 20% growth.
- Experience - Participating carriers continue to report favorable experience with their Critical Illness insurance line, with 62% of insurers reporting lower than expected claims to date.
- Focus on Market - No respondents reported an intention to decrease their efforts in this market, and a staggering 58% indicated they intend to increase their focus on Critical Illness insurance over the next two to three years.
- Current Market Penetration - Despite years of double-digit growth, the U.S. Critical Illness market remains barely penetrated. Our estimates, using current in-force statistics and a conservative view of the target market (ages 30-65 with incomes between $40,000 and $150,000), suggest that only 6%-8% of the potential market currently has Critical Illness insurance coverage.
Do these facts point to "opportunity" where there is "a favorable juncture of circumstances" and "a good chance for advancement or progress"?
We think, Yes. What do you think?
If you are a U.S. company interested in participating in our next U.S. market survey (which will commence in May 2018), you can sign up to be notified about it.