Survey - Group Business Rebounds
Our recently released U.S. Group Disability (LTD and STD) and Group Term Life market survey shows that sales premium growth bounced back in 2012, outperforming experience in recent years. Combined total Group LTD and STD new sales premium for participating carriers was just over $2.1 billion at year-end 2012, an impressive 8% increase over 2011 results. Combined total Group Term Life and AD&D new sales premium reported by participating carriers was around $2.5 billion at year-end 2012, an increase of 2% over 2011 results.
In-force premium showed a modest improvement across the board, making this the first time in three years that all three products experienced positive growth in both new sales and in-force premium. In-force growth for Total Group Term Life was up 4% in 2012, while total AD&D in-force premium levelled off to 0%, still an improvement on the negative results reported over the last three years.
But it’s clear that the new sales results were influenced by a select few carriers with significant large case activity taking the lead. For LTD, STD and Group Term Life, growth rates are weighted by premium and large cases moving from one carrier to another can heavily influence industry growth calculations. A similarly small number of carriers also appear to have played a role in the double-digit increases in Voluntary Group Disability.
Improvements in persistency were an important element in the continued gains in in-force premium and carriers succeeded in strengthening their client retention levels in 2012. It will be interesting to see if sales and in-force growth keeps its momentum as we head toward mid-year 2013.
For more details, read the summary publication of our U.S. Group Disability (LTD and STD) and Group Term Life market survey.