2018 U.S. Critical Illness Insurance Market Study Shows Continued Strong Growth

September 11, 2018| Von Steve Rowley | Critical Illness | English

Region: North America

Gen Re has just completed our 17th annual U.S. Critical Illness Insurance Market Survey, and we are pleased to announce that the industry continued to grow steadily and profitably. Seventy‐five carriers participated in this year’s survey. Of those, 51 were actively selling a Critical Illness product; 16 were currently developing a Critical Illness product and the remaining eight were exploring entry into the market. We estimate that these results cover more than 95% of the U.S. Critical Illness insurance market.

Participants reported just over $652 million in new sales for 2017. This represents an astonishing 37% increase over 2016 reported sales figures. As has been the case for years, the group/worksite segments account for the majority (85%) of sales. This year’s results, however, show extremely strong growth in the individual segment of the market, which grew from just 4% of premium in 2016 to 15% in 2017.

As with prior years, all indicators suggest that the U.S. Critical Illness market remains in a period of healthy expansion:

  • New carriers continue to enter the market.
  • Existing carriers are adding new products.
  • 64% of respondents plan to increase their focus on CI.
  • Insurers expect to see annual sales growth of 22% ‐ 38%.
  • The majority of carriers are meeting or exceeding their expectations for sales, profitability, agent acceptance and consumer demand.
  • 93% of carriers report claims matched or were better than their expectations.

Churn rate for this business has been a topic of discussion throughout the industry for several years. As a result, we added a number of questions on the issue of takeover business. For 2017 group/worksite carriers reported that 42% of attained age cases - and 38% of issue age cases - replaced existing coverage. The most common reason for changing carriers was that the customer was dissatisfied with the prior carrier’s service.

Also new this year was a section on group/worksite accident insurance which included responses from 39 carriers. These carriers reported nearly $605 million in new sales for 2017 and nearly two-thirds of responding carriers expect to see double digit sales growth in the next few years. The average new premium reported for new business sales was $239.

The complete results of this report are available to participating carriers only. If your company would like to participate in future Critical Illness market surveys, please contact Stephen Rowley.

*Caution should be used in interpreting these comparisons, as the companies participating vary from year to year. In addition, as awareness of and interest in this product increases in the U.S., new companies are constantly entering the market.


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