Survey Looks at Individual Disability Trends

A recent news article looked at a survey conducted by Milliman, an actuarial consulting firm, of 15 U.S. individual disability insurance issuers.[1]  These 15 companies made up about 90% of the individual disability insurance sales in the U.S.

Questions elicited a variety information, including coverage available, occupations of purchasers, and sales information. Based on the insurance companies’ answers, analysts found the following:

  • Doctors and surgeons purchased fewer new policies (down from 31% to 30%)
  • Attorneys purchased more new policies (up 6.1% to 6.4%)
  • Policies sold overall increased between 2019 and 2019 (up 13%)
  • Annualized premiums from new policy sales increased (up 1.5%, to $401 million)

The percentage of applicants who received “issued as applied coverage” rose slightly (about 1%) and the rate of applicants who received rates higher than expected or coverage terms that were tougher than expected dropped (about 2%). However, analysts also concluded that individual disability insurers may have rejected a high percentage of applicants in 2018 than 2017, with the percentage of those receiving flat rejections rising from 16.1% to 16.6%.

In looking at this data, analysts surmised one reason for this shift could be based on which insurance companies were selling the coverage, as each insurer has unique approaches to underwriting.  For example, one insurer may reject a higher percentage of applicants, while another may reject fewer applications but provide modified coverage.


[1] Allison Bell, Individual Disability Rejection Rate Looks Higher: Milliman, Think Advisor, Nov. 27, 2019, 9:31 p.m.


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