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More than ever, Individual Disability carriers want to better understand how they can improve their risk management processes and benchmark their working practices against the competition. Gen Re’s Research team conducted its 2022 “U.S. Individual Disability Risk Management Survey,” specifically designed to do just that.
Twelve companies participated in our survey which includes sections on underwriting – both fully underwritten and Guaranteed Standard Issue (GSI) as well as claims management practices and targeted case studies. The final report provides aggregate industry results while keeping individual company data confidential.
Here’s snapshot of what we found out.
If you have any questions about the survey or would like to follow up on any of the underwriting or claim management segments, please reach out to us.
Traditional fully underwritten policies continue to be a major source of new premium in the non‑GSI market.
About 70% of fully underwritten policies were placed in 2021. Despite the impact of the COVID‑19 pandemic, placement rates are consistent with prior years.
Incomplete policy submissions, 7% of Individual Disability applications, continue to reduce placement rates. As more carriers employ automated underwriting system, the expectation is a decline in incomplete applications in the future.
Less than 50% of fully underwritten policies are issued as applied. 40% of the policies had some combination of rating, rider, or plan design modification.
Only three carriers have implemented automated underwritten programs as of 2021. However, three other carriers without an automated underwriting are planning to implement a program in the future. (40% don’t plan to implement.)
Maximum issue and participation limits continue to be highest in the medical and white-collar marketplace.
Despite an increase in Individual Disability Income claims due to the COVID‑19 pandemic, approved claims per 1000 policies continued to decrease in 2021. Per recent SOA incidence rate studies, incidence rates were 5.5 per 1000 from 2012 to 2014. The 2021 incidence rate of 4.1 per 1000 represents a 3.8 improvement per annum over those historical rates.
One in three claims had decisions rendered within 25 days of receipt of complete information. Over half of all claims were decided within 50 days.
Claims risk management staffing is about one manager and support staff for each claim analyst. About 44% of the industry’s IDI staffing are managers and support employees. While 56% of the industry’s Individual Disability staff are claims analysts.
Despite challenges with remote work and claim analyst retention, Individual Disability industry turnover rates continue to be low at 14%.
Average |
Range |
|
14% |
0%–33% |
Overall, despite a challenging 2021, the Individual Disability industry continues to be strong. COVID‑19 presented the industry with difficulties in the claim managements, sales and underwriting workflows. Incidence rates continue to be favorable despite these challenges.
With many carriers having, or planning to implement, automated underwriting programs, the Individual Disability industry should be able to improve policy placement rates with faster and more accurate underwriting decisions.
Earlier this year, Gen Re also published the results of our annual “Individual Disability Market Survey”. If you haven’t seen this, you can view our blog or longer survey summary.
