TOP
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 Group/Worksite Issue Age products, as well as Accident Insurance.
Thirty-five companies that are actively marketing a Critical Illness (CI) product or have in‑force business responded to the survey. The scope of this year’s survey does not include non-marketers.
Twenty-nine companies completed the section on Accident Insurance.
Throughout the following 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. Also 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.
Of the 35 participating companies, 15 offer one CI product, 17 offer two products and the remaining offer three products. The majority (28 or 80%) offer a Group/Worksite (G/W) product, with 15 companies offering both Attained Age and Issue Age CI.
In total, the results represent 68 products currently being marketed. While 10 companies plan to make changes to their current G/W offering, only one plans to modify their Traditional Individual product.
Close to two-thirds (66%) of companies expect to increase their focus on CI over the next few years. None said their focus would decrease.
When asked how overall sales results compared to goals for 2021, 43% reported exceeding or meeting their sales targets.
For those companies that missed their goals, COVID‑19 restrictions were cited as having the greatest impact on results. Other negative impacts were attributed to lower than anticipated prospect activity, pricing changes, filing limitations, and ability to attract agents interested in selling CI. Increased awareness and interest in CI due to the pandemic contributed to more positive results for those companies that exceeded their targets.
The issue age for new business averaged 43 years for all three products combined. Traditional Individual averaged the highest issue age at 48 years, compared to 41 years for both G/W Attained Age and Issue Age.
When comparing only those companies that provided product data for both survey years and taking into account any adjustments made to the 2020 data, the CI industry as a whole continued to exhibit positive growth in 2021, despite COVID‑19 impacts.
For 2021, participants reported selling 2.6 million new policies/certificates and roughly $584.2 million in new sales premium. In terms of new sales premium, G/W Attained Age represents the largest segment, with $342.1 million of new sales premium, or 59% of the total.
Participating carriers reported a combined total of 5.6 million policies/certificates with $1.7 billion of in‑force premium in 2021. Based on in‑force premium, G/W Attained Age business accounted for 54% of the total, with $913.5 million in premium.
At the time the survey was conducted, 66% of participating companies were not considering adding a COVID-specific trigger. Thirty-four percent had already added, were considering adding, or planned to add a COVID-specific trigger to their CI plan.
Similarly, 37% of companies (13 out of 35) had already added or were considering/planning to add a COVID-specific rider to their CI plan. Sixty-three percent of respondents were not considering adding a rider at the time of the survey.
Ninety percent of companies underwrite their CI products in‑house exclusively. One company outsources their underwriting to an external vendor.
Seventy-five percent of companies indicate technology deficiencies are one of their top three challenges to underwriting (U/W) CI products. Less than a third of companies mentioned getting necessary medical/physician support (30%), maintaining U/W manual (30%), and insufficient resources (25%).
At the time that data was collected in April and May of 2022, 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, close to twice as many companies reported that changes were implemented nationwide, versus in a (few) state(s) only.
The average age of a claimant at time of claim was 61 years for Traditional Individual, compared to 51 years for both G/W Attained Age and G/W Issue Age.
On a combined basis, the three major diagnosis categories represent 80% of the claims submitted for Traditional Individual, 78% for G/W Attained Age, and 71% for G/W Issue Age.
Twenty-nine companies provided results for their Accident insurance product. For 2021, participating companies reported over 2.5 million new Accident policies and $454 million in new sales premium. For in‑force business, roughly 7.4 million policies and $1.6 billion in premium was reported.
Taking into account any adjustments made to 2020 data, new sales premium and policies increased by 1% and 6%, respectively for those companies providing data for both survey years. Both in‑force premium and policies continued to exhibit positive growth in 2021.
For companies tracking this data, issue age for new business averaged 42 years for 2021 and ranged from 39 to 58 years.
Sixty-six percent of companies offer Worksite Accident only, while 21% offer both Worksite and Individual plans.
Issue age for new business averaged 42 years for 2021 and ranged from 39 to 58 years.
For Group/Worksite policies, almost all companies (95%) require policy holders to be actively at work. Eighty-four percent of companies require a minimum number of lives, and 53% require a minimum percentage of participation. A higher number of companies reported occupation (44%) and medical questions (22%) as underwriting requirements for Individual policies.
On average, it takes 10 business days for companies to process an Accident claim, with the number ranging from two to 69 days.
Only 18% of companies auto-adjudicate claims at some level. Forty-six percent of companies auto-adjudicate wellness only claims.
Of those companies who currently auto-adjudicate claims, noted criteria for adjudication included diagnosis/trigger (73%), claim dollar amount (18%), and policy is incontestable (9%).
Download the PDF version for a list of participating companies and survey notes.
