Critical Illness Insurance – Highlights of 2021 U.S. Market Survey
Gen Re is pleased to share this summary of key highlights from our latest U.S. Critical Illness Insurance Market Survey. The full report provides insight into the state of the market, tracking sales and in‑force results for Traditional Individual, Group/Worksite Attained Age and Issue Age products, and Accident Insurance.
Thirty-nine companies that are actively marketing a Critical Illness product or have in‑force business responded to the survey – with 31 companies completing the section on Accident Insurance.
Throughout the report, some comparisons have been made to prior years’ results. Caution should be used in interpreting these comparisons, as the companies participating vary from year to year. In addition, as awareness and interest in this product increases in the U.S., new companies are constantly entering the market. While each report is intended to be a snapshot for that year, we understand the importance of identifying trends and to that end have provided some commentary.
Critical Illness Survey Results
Marketing Critical Illness Products
Of the 39 participating companies, 21 offer one Critical Illness product, 17 offer two products and the remaining company offers three products. The majority (32 or 82%) offer a Group/Worksite (G/W) product, with 15 companies offering both Attained Age and Issue Age CI. (Exhibit A)
In total, the results represent 77 products currently being marketed. While 7 companies plan to make changes to their current G/W offering, only one plans to modify their Traditional Individual product.
2020 Sales Results Compared to Goals
When asked how overall sales results compared to goals for 2020, 44% reported exceeding or meeting their sales targets. (Exhibit B)
For those companies that missed their goals, COVID‑19 restrictions were sighted as having the most significant impact on results. Other negative impacts were attributed to competition, lack of flexibility in the market, and limited product flexibility.
Average Age at Time of Sale
The issue age for new business averaged 43 years for all three products combined. Traditional Individual averaged the highest issue age at 47 years, compared to 42 years for both G/W Attained Age and Issue Age. (Exhibit C)
Same Company Growth
When comparing only those companies that provided product data for both survey years and taking into account any adjustments made to the 2019 data, the CI industry as a whole continued to exhibit positive growth in 2020, despite COVID‑19 impacts. (Exhibit D)
New Business Sales
For 2020, participants reported selling 2 million new policies/certificates and about $561.6 million in new sales premium. In terms of new sales premium, G/W Attained Age represents the largest segment, with $289.9 million of new sales premium or 52% of the total. (Exhibit E)
Participating carriers reported a combined total of 5 million policies / certificates with $1.5 billion of in‑force premium in 2020. Based on in‑force premium, G/W Attained Age business accounted for 47% of the total, with $727.8 million in premium. (Exhibit H)
The majority of companies (78%) underwrite their CI products in‑house exclusively, while six (17%) outsource their underwriting only. (Exhibit K)
Top Underwriting Challenges
Seventy-seven percent of companies cite technology deficiencies as one of the top three challenges to underwriting CI products. Fewer companies mentioned training (55%), achieving turnaround time (46%), and getting necessary medical/physician support (41%). (Exhibit L)
Claims Experience to Date
At the time that data was collected in June and July of 2021, all participants reported their claims incidence was less than or matched their expectations since the inception of their program.
For those companies whose claims experience deviated from expectations, most reported that changes were implemented nationwide, versus in a (few) state(s) only. (Exhibit M)
Average Claimant Age
At time of claim, the average age of a Traditional Individual claimant was 56 years, compared to 51 years for both G/W Attained Age and Issue Age. The lowest claimant age reported was 40 years for Traditional Individual and G/W Issue Age, and the highest was 72 years for Traditional Individual. (Exhibit N)
Types of Claims
On a combined basis, the three major diagnosis categories represent 84% of the claims submitted for Traditional Individual, 78% for G/W Attained Age, and 80% for Issue Age. (Exhibit O)
Accident Survey Results
New Sales and In‑force Business for Accident Insurance
Thirty-one companies provided results for their Accident insurance product. For 2020, participating companies reported nearly 2.7 million new Accident policies and $483.9 million in new sales premium. For in‑force business, roughly 7.7 million policies and $1.5 billion in premium was reported.
Same Company Growth
When comparing only those companies that provided data for both survey years and taking into account any adjustments made to the 2019 data, new sales premium declined 14%, while both in‑force premium and policies continued to exhibit positive growthin 2020. (Exhibit P)
Issue Age for New Business
For companies that track the data, the average issue age for new business averaged 42 years for 2020 and ranged from 36 to 57 years. (Exhibit Q)
Type of Plan Offered
Nearly 70% of companies offer worksite Accident only, while 19% offer both worksite and individual plans. (Exhibit R)
For Group/Worksite policies, almost all companies (96%) require policy holders to be actively at work. Seventy-one percent of companies require a minimum number of lives, and 42% require a minimum percentage of participation. A higher number of companies reported occupation (40%) and medical questions (20%) as underwriting requirements for Individual policies. (Exhibit S)
On average, it takes nine business days for companies to process an Accident claim, with the number ranging from two to 27 days.
Only 20% of companies auto-adjudicate claims at some level. Twenty-three percent of companies auto-adjudicate wellness only claims. (Exhibit T)
Of those companies who currently auto-adjudicate claims, noted criteria for adjudication included diagnosis/trigger (50%), claim dollar amount (17%), and policy is incontestable (17%).
If your company is interested in participating in next year’s survey, please contact me or Kayla Rooney, Supplemental Benefits Account Executive.
Download the PDF version for a list of participating companies.