New Report: Double-Digit Growth for workplace benefits

If you’re in the workplace market, your business is likely already feeling this good news. If you’re not in the workplace market, perhaps it’s time to consider the opportunity.

In mid-December, 2021, LIMRA announced that new annualized premium for workplace life insurance, disability insurance, and supplemental health insurance products increased significantly in the third quarter of 2021. The evidence for the increases was provided by LIMRA’s workplace benefits sales surveys.

Sales Rebound

“After the disappointing results in 2020, workplace benefits sales have rebounded in 2021,” said Patrick Leary, corporate vice president and director of LIMRA’s workplace benefits research program. “In a very competitive job market, employers recognize the need to offer a robust benefits package to attract and retain the best talent. Our research suggests non-medical benefits to rise at least 20% over the next five years.”

In the third quarter of last year, total workplace life insurance new premium was $648 million, which is up 29% when compared with the third quarter of 2020. Year-to-date (YTD), total workplace life insurance premium increased 7% to $2.9 billion. In the first nine months of 2021, new permanent life insurance premium increased 13%, representing 14% of the workplace life insurance sold. Term sales grew 6% YTD, holding 86% market share for the workplace life insurance market.

Raising awareness

“Our research finds that COVID-19 has raised workers’ awareness about the importance of workplace life insurance. In a recent survey, half of workers said workplace life insurance was more important to them due to the pandemic,” Mr. Leary said. “This increased employee awareness, coupled with a tight job market, should continue to propel life insurance sales over the next several years.”

Voluntary workplace life insurance premium — a subset of total workplace life insurance — increased a full 50% in the third quarter to $395 million. YTD, voluntary life premium was $1.7 billion, an 11% increase from the prior year. Growth in the voluntary market was widespread with more than 60% of participating carriers reporting growth.

For disability insurance, total workplace disability insurance new premium was $515 million in the third quarter, 11% higher than prior year. YTD, total workplace disability new premium was $2.7 billion, a 5% increase from the same period last year.

Driving growth

Voluntary (100% employee paid) products drove most of the growth. Voluntary disability premium increased 12% in the first three quarters, while employer-paid premium increased as well, but only 1%. In the first nine months of 2021, long-term disability premium rose 4%, and short-term disability premium increased 6%, compared with prior year.

With supplemental health insurance, the total workplace supplemental health insurance premium totaled $4.4 million in the third quarter, up 16% from third quarter 2020. YTD, supplemental health new premium was $1.9 billion, a 4% increase from the same period in 2020.

All supplemental health insurance product lines recorded positive growth in premium in the third quarter: accident insurance increased 18%, critical illness rose 6%, cancer insurance grew 9%, hospital indemnity was up 25%, and other supplemental health benefits increased 33%.

Charles K. Hirsch, CLU, is the president of Hirsch Communications Consulting, LLC,
a communications consulting operation in Florissant, MO. For many years, Chuck was the editor and publisher of Life Insurance Selling magazine and has published several of the leading life insurance industry magazines. He continues to contribute articles on a regular basis to industry publications, in addition to providing a wide range of writing, editing, content development, and marketing services through his firm. He is a regular contributor to NAILBA Now e-Newsletter as well as to Perspectives magazine.