Another thing we can blame on the economy: The U.S. individual disability income market's combined premiums dropped for the second consecutive year as a result of poor economic conditions. But there's good news: The drop from 2009 to 2010 (3.4 percent) was significantly lower than the previous year (12.5 percent) signaling future sales may be on the rebound.

This information comes from a 2011 survey by Milliman of the IDI market. Although the economy has caused depressed sales, it has not resulted in unfavorable claim trends—the survey found there is an underlying strength in claim experience and overall profitability.

Additionally, new premium on policies sold to physicians continues to grow, both in absolute dollars and as a percentage of total new premium for the industry. The growing prevalence of IDI sales to those in medical occupations is similar to sales patterns prior to catastrophic financial losses of the mid-1990s, Milliman reports.

More aggressive competitiveness among IDI carriers in recent years has been disconcerting to many contributors who fear a return to the hyper-competitive pressures experienced during the 1980s and early 1990s. Besides competitive pressures, insurers say the economy as well as aging or uninterested producers is an obstacle to long-term financial health of the IDI market.

Milliman surveyed 15 insurance companies, which they say represent 90 percent to 95 percent of traditional IDI new business, about business issued between 2002-10, the distribution of sales among key marketing segments, current underwriting requirements, product offerings and market trends.

Instant Insights /

Future rebound for disability income market?

More From HR Executive

Related Stories

Recommended For You