Struggling Economy and Changing Legal Definition of Disability Also Factors
(Hartford, CT) June 3, 2002 – Consumers are generally less
aware of their need for disability insurance as they are for life and medical insurance, a
perception that poses one of the biggest hurdles to the disability insurance industry’s
long-term growth, according to a new study by Conning Research.
In the study “Disability Income Insurance; The Long
Voyage To Profitability” Conning cites two other challenges for disability insurers:
the continually expanding definition of disability and the economic downturn/slowdown that
began in late 2000 and has continued into 2002. Historically, disability insurers faced
higher losses in periods of sustained economic turmoil, and also have been adversely
impacted by reduced levels of investment income.
“Consumer awareness and attitude are focused on life
and medical insurance and retirement planning, not disability income protection,”
said Jim Smith, Assistant Vice President at Conning Research and author of the study
entitled. “Low consumer awareness has hampered sales particularly to medium and small
business and their employees. Group disability writers have not effectively penetrated
these segments because smaller businesses are not hearing pressure to do so from their employees.”
But the risks for consumers are real. For example, the
Conning Research study found that thirty-year-old women have a 57% chance of becoming
disabled and only a 16% chance of dying before age 65. Yet female employees often overlook
the need for disability income benefits, asking instead for improved medical and life insurance benefits.
The ever-changing legal definitions of what constitutes a
disability will impact disability insurers as well. Stress-related disabilities,
9/11-related or otherwise, are becoming more common. Disability advocacy campaigns and
recently passed laws, such as The Americans with Disabilities Act, have sensitized employers to
disability issues and made them more accepting of mental conditions as well as physical ailments.
Disability insurers face these challenges in the context of
an extremely concentrated marketplace. The five largest insurers accounted for more than
half of the industry’s written premium in 2000.
Conning Research suggests that successful disability
insurers will focus on four critical success factors:
Product enhancement and underwriting improvement
Improved marketing strategies and distribution mediums
Improved and expanded case management
Prudent investment and expense management
The Conning Research study, Disability Income Insurance:
The Long Voyage To Profitability, is available from Conning Research for $800 by calling
toll free (888) 707-1177 or (860) 520-1575. A complete listing of all Conning Research
Strategic Studies can also be found by visiting the company’s Web site at
About Conning Research & Consulting, Inc.
Conning Research & Consulting, Inc. is a nationally respected provider of research
publications on the insurance and healthcare industries. Conning Research & Consulting, Inc. is located
at CityPlace II, 185 Asylum Street, Hartford, CT 06103.