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Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
Miele Consulting
One of the most respected names in group disability reinsurance
57 Foreside Road Falmouth, Maine 04105
(207) 781-9069
Fax (207) 781-2053
The U.S. Bureau of Labor Statistics reports that Short Term Disability Insurance (or Accident & Sickness) is more than twice as likely to be included as a benefit than LTD for firms over 100 lives. For those groups, it is also much more likely to be a part of negotiated benefits covering blue collar workers. Their survey indicates that 26% of all under 100 life firms provide coverage for full time employees. This increases to 87% for over 100 life firms.
The trend for STD coverage is towards full or partial self-funding as the risk is predictable, measurable and non-catastrophic. Estimates are 30% of the market self-insure.
The small group market remains largely untapped for Group LTD and offers great profit and growth potential. 87 % of all U.S. Firms employ fewer than 20 employees.
Successful products are designed specifically for this unique market. Our experience is that this market is best served with simple yet comprehensive coverage that offers some flexibility. Pricing must be within the budget of cost conscious employers. Sales emphasis must be needs focused and solutions orientated. Benefits and plan provisions must be easy to explain, understand, and sell. Carrier administrative details need to be kept minimal.
The market for traditional LTD business (employer groups of 10 lives or more) presents great opportunity for insurers.
While some employer groups are more likely to have coverage, many still do not. The U.S. Bureau of Labor Statistics reports that 23% of all full time employees working for employers with under 100 employees have coverage (for professional occupations the percentage increases to 43%). For firms employing over 100 employees, 41% of full time employees working have coverage (64% of professionals in those groups have protection).
The overall disability market’s premium potential is about $21 billion. With an in-force estimate of $7 billion, there remains about $14 billion in potential sales opportunity.
The current trend in traditional LTD plans is for a return to the basics, with greater emphasis on more responsible plan design, early intervention and return to work benefits. Seamless initiatives (combining short and long term products) or integrated concepts (coordinating with Workers Compensation) facilitate those efforts.
Despite pricing pressures due to rising claims incidence, lower recovery patterns and lower interest paid on reserves the marketplace remains very competitive. Market control by some dominant players is eroding as they place more emphasis on rate renewals and retention than on new business. For some, the situation is compounded by the need to correct overly generous plan designs and liberal underwriting guidelines.
Today, underwriting is more comprehensive. Acquisitions, mergers and layoffs have weakened the significance of past claims experience. More subjectivity is necessary in determining both adequate price and appropriate case level plan designs.
Seamless disability is the combination of short and long term disability coverage in a single, comprehensive contract and certificate. It requires a single application and employers receive a single bill.
Research indicates that employers with LTD are more likely to have STD and usually, the coverages are purchased at the same time. Case persistency is better when disability coverages are underwritten by the same carrier.
Joined together these coverages offer consistent plan design, definitions and policy terms. The claim process is simplified with one form, eliminating redundancy. Seamless coverage facilitates transition from a short to long term claim.
The combination of short and long term disability plans provides a reduction in administration and underwriting costs over purchasing the coverages separately. Additionally, Seamless provides the best opportunity for early intervention and encouraging return to work and rehabilitation for long term claims. For employers, Seamless Disability coverage is one of the most effective means to manage the cost of disability.
Voluntary LTD is group coverage endorsed by an employer and paid for entirely by those who elect to participate. The employer bears no direct cost other than time allowed to enroll and the administration of payments through payroll deduction.
Due to a higher degree of anti-selection, the product requires special design and underwriting guideline considerations. Working with clients experienced in this unique line business, we understand the importance of providing a compatible disability offering to compliment other existing products.
Our experience has shown this to be a viable product, however, one that requires a greater administrative effort on behalf of companies that offer it. Options should be kept simple and ideally limited, i.e.; one of two benefit durations or elimination periods. Research indicates that portability is important. We recommend our clients offer a guaranteed conversion option.
Another critical success factor is in the area of enrollment capabilities. Voluntary enrollment requires the combination of exceptional marketing support materials, basic and effective selling skills and efficient administration.
The sale is a two step process. First with the employer to endorse and communicate the availability of the plan to workers. Then to the employees in a general informational meeting followed by enrollment sessions. Periodic re-enrollment is necessary to maintain adequate participation and the overall integrity of the plan.
The major advantages to Voluntary are:
- no direct cost to the employer;
- disability coverage that might not otherwise be available;
- the convenience of payroll deduction;
- lower rates available through group coverage; and
- guaranteed insurability.
Today, due to regulatory issues and over 80 years of conventional delivery of insurance products, 24-hour coverage as a product remains a combination of A&H and Casualty lines. The 24-hour concept is more of a joint venture in comprehensive disability management - applying the best practices in STD, LTD, DBL, WC & Medical Insurance. Commonly referred to as Integrated Disability Management, the overall goal is to minimize the impact and cost of disability. Savings are realized through the aggressive and proactive management of existing disabilities, improving return to work results and disability prevention efforts.
Employers, recognizing that their largest investment is "human capital", know that productivity increases in direct proportion to the number of employees who report to work as scheduled. A decade of downsizing and restructuring has had its consequences on long-term productivity gains and some lessons have been learned regarding the impact on disability claims.
Estimates of the direct and hidden costs of disability are between 14 and 18 % of an employer's payroll. With those costs growing at a annual rate of 8 %, and with a projected ten year incidence increase of nearly 40 %, employers and insurers have strong incentive to address issues of waste, abuse, overlap and a system with built in disincentives. It has been suggested that an employer can reduce these Total Costs by at least 15 %. In most cases, for an employer going from the traditional (or limited) approach to disability management the savings will exceed the added costs to administer or outsource the "new" program.
A recent survey about integrated disability management indicated that nearly two thirds of employers have programs in place or plan to implement them.
We believe that opportunities abound for regional A&H and P&C Carriers to capitalize on Integrated Disability Management.
The evolution to true 24-Hour coverage will require investment, flexibility, information and a long learning curve. Educating employers, employees, unions, lawmakers, the medical community and producers will be key to its success.
2001 Employee Benefit Plan Review
STD & LTD
An Executive Summary
Numbers below are based upon those reported and our estimates on those listed N/A.
For a breakdown by Insurance Company - click on the appropriate links to either download an Excel 2000 Spreadsheet or view that spreadsheet on-line.
Short Term Disability
(23 Companies Reporting)
New Plans Written 2000
Average Case Size 117 Lives
Average Case Annual Prem. $17.6K
Average Monthly Prem. per Life $12.59
In-force (thru 12/31/2000)
Average Case Size 73 Lives
Average Case Annual Prem. $10.0K
Average Monthly Prem. per Life $11.41
Click below on file to download
or
Click below to view spreadsheet on-line - when done viewing close that window to return to ViewPoints.
Long Term Disability
(24 Companies Reporting)
New Plans Written 2000
Average Case Size 170 Lives
Average Case Annual Prem. $29.8K
Average Monthly Prem. per Life $14.58
In-force (thru 12/31/2000)
Average Case Size 164 Lives
Average Case Annual Prem. $31K
Average Monthly Prem. per Life $15.74
Click below on file to download
or
Click below to view spreadsheet on-line - when done viewing close that window to return to ViewPoints.
A collection of views on trends and the
future direction of group disability products.
Click below to contribute to ViewPoints
Click below to return to home page
A collection of views on trends and the future direction of group disability products.
Click below to contribute to ViewPoints
Click below to return to home page
A collection of views on trends and the future direction of group disability products.
Click below to contribute to ViewPoints
Click below to return to home page
A collection of views on trends and the
future direction of group disability products.
Click below to contribute to ViewPoints
Click below to return to home page
A collection of views on trends and the
future direction of group disability products.
Click below to contribute to ViewPoints
Click below to return to home page
A collection of views on trends and the
future direction of group disability products.
Click below to contribute to ViewPoints
Click below to return to home page
A collection of views on trends and the
future direction of group disability products.
Click below to contribute to ViewPoints
Click below to return to home page
A collection of views on trends and the
future direction of group disability products.
Click below to contribute to ViewPoints
Click below to return to home page
A collection of views on trends and the
future direction of group disability products.
Click below to contribute to ViewPoints
Click below to return to home page
A collection of views on trends and the
future direction of group disability products.
Click below to contribute to ViewPoints
Click below to return to home page