Inforce Premium Growth Continues for Group Life, Disability, According to 2007 JHA Surveys

“Group life sales remains a challenge.”

Drew King, president of research firm JHA, made that observation as he summed up the results of the recently released 2007 U.S. Group Life Market Survey, which covers Group Term Life (Basic Term and Voluntary Term Life) inforce and sales premium. Thirty-two insurance carriers participated in the survey.

Total Group Term Life inforce premium increased 3 percent in 2007 to just over $18 billion. Basic Group Term Life still accounts for the majority of the total premium.

The number of employers offering Group Term Life coverage rose 1 percent, while the total number of insured employees increased by 2 percent.

Compared with 2006, Group Term Life sales remained flat, at just under $2 billion. While premium remained level, volume decreased by 3 percent compared with 2006, which resulted in reduced face amounts on new policies. The average face amount on a new Group Term Life policy in 2007 was just over $64,000.

JHA also released results of the 2007 U.S. Group Disability Market Survey, where the results were noticeably better than in the Group Life Market Survey. Twenty-seven insurance carriers participated in this poll, which covers Short Term Disability (STD) and Long Term Disability (LTD) inforce and sales premium.

Group Disability sales increased at a strong, double-digit pace, totaling just under $2.2 billion in new annualized premium. STD sales premium increased by 10 percent, and new LTD sales premium showed an increase of 18 percent in 2007.

Group Disability inforce premium grew approximately 5 percent, reaching close to $12.8 billion. Participating companies reported a 4 percent increase in STD inforce premium and a 6 percent increase in LTD inforce premium.

The number of employers offering STD grew 1 percent, while those offering LTD jumped 3 percent. The total number of insured employees increased 3 percent for STD and 5 percent for LTD.

“Inforce premium growth continues on a steady pattern for the industry for both Group Term Life and Group Disability products,” King said. “Sales results for both STD and LTD were in the double-digits after being sluggish for the past couple of years.”

Summaries of both surveys are available at the JHA Web site.