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Perspective

Good Prognosis for Critical Illness Insurance Market - Survey

September 16, 2014| Von Steve Rowley | Critical Illness | English

Region: U.S.

The critical illness insurance sector is in good health. That sounds like a contradiction in terms; in fact it’s the conclusion of our 13th annual Critical Illness Insurance Market Survey undertaken by Gen Re in conjunction with the National Association for Critical Illness Insurance (NACII). 

Fifty companies participated in this year’s survey, with 32 carriers currently marketing a CI product. Of the 18 companies not actively marketing a CI product, 13 are considering or developing one. We believe that the combined results of the Gen Re/NACII study, together with shared data from research by LIMRA, represent around 90% of the U.S. CI insurance market.
The survey results point to continuing strong growth in the CI market. Sales in 2013 totaled $332 million, which was up 8% from 2012. More importantly, for carriers who participated in both the 2012 and 2013 surveys, premium grew by 17% on average. When asked about future growth expectations, respondents said they anticipated average annual growth rates of 10% (Traditional Individual), 14% (Worksite), and 15% (True Group) respectively, over the next three years.
 
New Business Premium 1999-2013
Another bright spot in the survey was the continuing stability of rates in the Traditional and Worksite markets from 2012 levels. Also, there was a reversal of steadily declining rates in the True Group segment, where the average annual premium increased 47%, to $9.53 per $1,000. 
 
Encouragingly, nearly all (97%) of the survey respondents indicated that claims experience was equal to, or less than, expected. 
 
For the first time in the survey, we added a question on the number of benefit eligibility triggers. We wanted to see if there’s any substance in the notion of a significant increase in the number and complexity of benefit triggers. In fact, we were surprised to find that the average CI insurance policy covers just 13 different conditions. 
 
 Number of Benefit Eligibility Triggers

Gen Re and NACII would like to express our gratitude to all of the carriers who took the time to participate in this important industry study. The complete 28-page survey is available to all participating companies. For more details, or if you wish to participate in next year’s survey, please contact me.

 

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