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April 12, 2011updated 13 Apr 2017 8:49am

US group life and disability market still in the doldrums

There was little to rejoice about in the US group term life and group disability sectors in 2010 with both remaining in the doldrums, according to studies by Berkshire Hathaway subsidiary Gen Re just released

By LII editorial

There was little to rejoice about in the US group term life and group disability sectors in 2010 with both remaining in the doldrums, according to studies by Berkshire Hathaway subsidiary Gen Re just released.

The studies covered group term life, and in the disability sector short-term disability (STD) and long–term disability (LTD).

Gen Re senior vice-president Drew King commented: “2010 proved to be another very challenging year for most companies in the group life and disability business. While health care reform has not yet been fully implemented, it appears to have distracted both employers and group benefits brokers in the past year.”

Gen Re noted that 32 carriers participated in the life survey and 28 carriers participated in the disability survey.

On group term life Gen Re reported that in-force premium in 2010 grew by 2% compared with 2009 to $20.3bn. Combined STD and LTD in-force premium rose by about 1% to $13.2bn. STD in-force premium grew 4% while LTD in-force premium remained level.

In terms of new business, Gen Re found that group term life sales remained flat in 2010, at $2.3bn.

Reported volume decreased by close to 5% while the average face amount on new group term life policies fell 10% to $79,204 in 2010.

Combined group disability (STD and LTD) sales fell by 13% to nearly $2.3bn. LTD and STD sales decreased by 4% and 17%, respectively.

King was not upbeat on prospects, noting that the uneven nature of the economic recovery and high unemployment limited growth opportunities in the group benefits market.

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