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Although the full effect of the COVID‑19 pandemic on the U.S. life and health insurance market is far from clear, it appears that in the short term, the U.S. Individual Disability market has not been negatively impacted.
Seventeen carriers participated in our 2021 U.S. Individual Disability Market Survey, representing 99% of the market and $5.1 billion of in‑force premium. New sales in 2021 were $399 million which was flat when compared to new sales in 2020. Breaking this down even further, both Non-Cancelable (Non‑Can) and Guaranteed Renewable (GR) sales were flat when compared to 2020. Non‑Can was down 0.1% and GR was up 0.5%. Of the $399 million in total new sales premium, Non‑Can products represent 84% or $334 million, and GR is 16% or $65 million.
When asked about meeting their 2021 sales goals, 47% of the responding companies said they missed theirs. 18% of the companies met and 35% of the companies exceeded their goals. Some of the reasons given for missing sales goals were:
The number of new policies issued grew by 2% to over 251,000 and total benefit amounts increased by 3% to more than $1.6 billion. The medical market continues to be a main driver of new business. In 2021, close to 30% of all new policies sold were in the medical market; however, the industry did see some growth down-market with increases in the number of new policies sold in the blue collar space.
Even though total new sales were flat in 2021, the Guaranteed Standard Issue (GSI) space did see substantial growth. New GSI sales were $57.5 million in 2021, up 20% when compared to 2020. This increase came from both employer and employee paid cases with increases of 22% and 18% respectively. Total in‑force GSI business increased also by 5% to $422 million.
We did ask the participants a specific question about the impact of COVID on their business in 2021, both positive and negative. On the positive side we heard from a number of carriers that they needed to adjust their underwriting guidelines to account for the limited face to face activity. They also talked about implementing or updating their digital processes. Both of these were well received by the field. On the negative side, we heard about higher decline rates on e‑apps since there was no field underwriting and the challenge of implementing annual increases on existing policy holders.
Finally, we asked the participants about their results in 2021. Even with the challenges of COVID, 53% of the responding companies said their results were better than plan. 41% had results as expected and only 6% had results worse than plan.
For more detail and data, see our Summary Report.
The pandemic may have created an awareness of income protection products among buyers that didn’t exist in the past. Gen Re’s experienced team of dedicated Disability underwriters and claims experts are here to support our clients. Get in touch today if there’s a particular topic I can help you with.
