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PORTLAND, MAINE: JHA released the results of the 2006 U.S. Group
Disability Market Survey, a leading industry benchmark survey covering
Short Term Disability (STD) and Long Term Disability (LTD) sales and inforce
premium. Thirty-two group disability insurance carriers participated in the
2006 survey, representing over 95% of the U.S. insured group disability market.
U.S. group disability (STD and LTD combined) inforce premium
grew approximately 7% in 2006, reaching over $12 billion. Participating
companies reported an 8% increase in STD inforce premium, and a 7% increase in
LTD inforce premium. The number of employers offering disability coverage
increased slightly at 5% for STD and 3% for LTD. The total number of insured
employees rose by 8% for STD and 6% for LTD.
Survey results also indicate that 2006 U.S. group disability
sales (STD and LTD) remained level compared to 2005, totaling over $1.9 billion
in new annualized premium. While STD sales premium fell by close to 2%, new LTD
sales premium showed an increase of 2% in 2006.
Although the top ten carriers continue to achieve the highest
share of sales in the U.S. group disability marketplace, their share of the
market declined slightly in 2006. The top ten companies wrote 73% of new STD
business in 2006, and almost 78% of new LTD business, compared to last year,
when the top ten carriers wrote 76% and 83% of new sales, respectively, for STD
and LTD.
“After posting a slight gain in 2005, overall industry sales
slipped a bit in 2006”, said Drew King, President of JHA. “Voluntary LTD
sales were up, after a couple of down years, which is a positive sign.
Inforce premium growth, which is dependent on renewals, persistency, and wage
inflation, was consistent with recent years.”
The annual JHA U.S. Group
Disability Market Survey tracks and reports sales and inforce premium
for both traditional and voluntary disability products. In addition, the survey
covers renewal activity, lapse rates, Administrative Services Only (ASO)
business, and the distribution environment. Participating companies receive the
full report.
JHA, a
subsidiary of General Re Life Corporation (a Berkshire Hathaway Company) is a
disability reinsurance, market research, and consulting firm located in
Portland, Maine. Since 1986, JHA has been helping its clients manage
disability insurance risk and improve their disability business
performance. Through its market research practice and consulting work,
JHA is the leading source for information and data about the disability
insurance market.
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