Windsor, April 22, 2002 — In-force premium for group life,
disability, and long-term care insurance all increased in 2001, a sign of the strength of
commitment to offering benefits among employers dealing with economic challenges,
according to reports from LIMRA International.
In-force premiums for group disability were up 5 percent
and for group life, 7 percent. But the strongest performance came in long-term care, with
in-force gains of 16 percent in premiums, 17 percent in employer-sponsored groups, and 14
percent in participants.
“For a year marked by rising unemployment and
significant economic uncertainty, these results should be encouraging to group
writers,” said Anita Potter, manager of LIMRA International group research. “The
outlook is positive. With continuing high health care inflation, voluntary benefits have
become an important part of current employer benefit strategies.”
Preliminary results of a joint study with the National
Association of Dental Plans (NADP) for group dental products show that, compared with
2000, in-force subscribers increased 5 percent. PPO subscribers increased 15 percent, DHMO
subscribers decreased 11 percent, indemnity decreased 6 percent, and referral plans
increased 40 percent. Total group dental sales, based on subscribers, increased 3 percent
in 2001. Growth was led by DHMO products, which increased 14 percent. PPO sales increased
9 percent; indemnity declined 12 percent. Overall, sales to new employer groups decreased
one percent, as did annualized new premiums.
New group life and disability premiums also grew, although
much of the activity in 2001 reflected movement of existing employer contracts rather than
new business. Group life premium was up 13 percent compared with 2000 and new group
disability premiums grew 7 percent.
The number of new employer-sponsored long-term care
insurance groups grew 10 percent. At the same time, new long-term care participants fell 1
percent and premiums were off by 6 percent. The top five issuers of employer-sponsored
group long-term care insurance accounted for 81 percent of total in-force premium in 2001,
according to Jennifer Douglas, project director of LIMRA’s group long-term care survey.
Term group life insurance saw a 27 percent increase in face
amount, a 3-percent increase in certificates, and a 7-percent decrease in master
contracts. Permanent group life insurance premiums increased 15 percent, face amount
decreased 15 percent, certificates increased 11 percent, and master contracts fell 17 percent.
Total group disability sales, including both fully insured
and administrative services only (ASO) plans, based on annualized premiums, grew 7 percent
compared with 2000. Short-term disability sales posted strong gains: fully insured
premiums were up 12 percent while ASO sales increased 18 percent. Long-term disability
fully insured sales increased 3 percent while long-term ASO sales declined 26 percent.
In-force premiums posted moderate to strong gains across
the board with the exception of long term ASO, which fell 10 percent. Total long-term
disability premiums increased 3 percent and short-term disability experienced a gain of 9
percent. The top five writers of group disability insurance accounted for 80 percent of new sales.
LIMRA International is a worldwide association
providing research, consulting and other services to more than 800 insurance and financial
services companies in nearly 70 countries. LIMRA was established in 1916 to help its
member companies maximize their marketing effectiveness.