Analysts at Gen Re say 2010 proved to be a challenging year for most companies in the group life and disability business, and that health reform has been a distraction for both employers and group benefits brokers.
According to the corporation's 2010 U.S. Group Disability Market Survey, total group term life inforce premium grew by 2 percent in 2010, totaling over $20.3 billion. Combined STD and LTD inforce premium rose slightly, by roughly 1 percent, totaling close to $13.2 billion. STD inforce premium increased by 4 percent while LTD inforce premium remained level year-over-year.
Compared to 2009, the total number of employers offering coverage declined by approximately 1 percent for group term life, and increased by 1 percent for LTD and STD. The total number of insured employees was up close to 1 percent for group term life, remained level for LTD and increased by 3 percent for STD.
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Group term life sales remained flat in 2010, at $2.3 billion. Reported volume for participating carriers decreased by close to 5 percent. The average face amount on new group term life policies increased by 10 percent, to $79,204 in 2010.
Combined Group Disability (STD and LTD) sales declined by 13 percent, to nearly $2.3 billion. Both LTD and STD sales decreased, by 4 percent for STD and 17 percent for LTD.
"While health care reform has not yet been fully implemented, it appears to have distracted both employers and group benefits brokers in the past year," says Drew King, senior vice president, Gen Re. "In addition, the uneven nature of the economic recovery and continuing high unemployment are limiting opportunities for growth in the group benefits market."
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