The group disability insurance industry as a whole collected more premiums in 2016 than the year before, according to Milliman Inc.'s 2016 U.S. Group Disability Market Survey.
The combined short-term disability and long-term disability in-force premium was $14.4 billion in 2016 among the 20 companies who contributed to the survey, versus $13.6 billion in 2015. Milliman estimates their total premium represents 85 percent to 90 percent of the group disability insurance market in terms of in-force business. Short-term disability in-force premium increased by 6.4 percent, and long-term disability in-force premium increased by 5.1 percent.
The combined short-term disability and long-term disability premium from new sales was $2.3 billion in 2016, versus $2 billion in 2015. Short-term disability from new sales increased by 12 percent, and long-term disability premium from new sales increased by 14.9 percent.
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Average long-term disability premium per life grew slightly from 2015 to 2016, for both in-force business and new sales. On the other hand, average short-term disability premium per life increased by 2.2 percent for in-force business, while declining by 3.1 percent for new sales.
The reported number of long-term disability cases sold increased 6.9 percent, while the number of long-term disability cases in-force only increased slightly from 2015 to 2016. Both the total long-term disability premium and the number of long-term disability covered lives from new sales increased significantly with more modest increases in in-force values.
For short-term disability, the reported number of cases sold decreased by 5 percent from 2015 to 2016 with a similar decrease in the number of cases in-force. However, short-term disability premium and covered lives from new sales show a similar pattern to long-term disability: large increases in new sales with more modest increases in in-force values. This implies an increase in the average lives per short-term disability case from 2015 to 2016, Milliman writes.
New features of Milliman's survey this year include expanded case size metrics and employer- vs. employee-paid data, new information on first-time buyer business, as well as long-term disability churn and statutory short-term disability metrics.
The report also ranks participating companies by both short-term disability and long-term disability in-force premium totals.
The 20 disability insurance companies that contributed data to the survey include Aetna, Cigna, Dearborn National, Guardian Life Insurance Co., The Hartford, Liberty Mutual, Lincoln Financial Group, MetLife, Mutual of Omaha, Prudential, The Standard, Sun Life Financial, Symetra, Trustmark Insurance, The Union Labor Life Insurance Co., UnitedHealthcare, Unum, USAble Life and Zurich North America Life.
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Katie Kuehner-Hebert
Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.
