Workplace life, DI and supplemental health premiums rebound in 2Q

WINDSOR, Conn., Oct. 6, 2022 — New annualized premium for workplace life insurance, disability insurance and supplemental health products increased in the second quarter, according to LIMRA’s workplace benefits sales surveys.

“After a sluggish first quarter, sales for workplace life and disability insurance products experienced solid growth in the second quarter,” said Patrick Leary, corporate vice president and director of LIMRA workplace benefits research. “Despite inflationary concerns, the awareness among employees of the need for insurance coverage remains even after their concerns about COVID-19 have waned, which helps explain the continued growth in certain voluntary products.”

Life Insurance
Overall, U.S. workplace life carriers wrote $587 million in total new annualized premium sales in the second quarter, 8% higher than second quarter 2021. Through the first six months of 2022, new workplace life insurance annualized premium totaled $2.2 billion, falling 3% from the same period in 2021.

“Term life insurance sales makes up the large majority of total group life insurance premium and drove the growth in the second quarter. Workplace term premium increased 9% in the second quarter but could not overcome the declines in the first quarter. As a result, term premium fell 4% in the first half of the year,” said Leary.

Permanent life premium increased 3% in the second quarter and 5% in the first half of 2022. Permanent life products hold 15% market share of the workplace life insurance market.

Disability Insurance
Total workplace disability insurance new annualized premium jumped 10% in the second quarter to $629 million. Despite the strong premium growth in the second quarter, first half workplace disability premium was $2.1 billion, down 4%, compared to prior year.

“Premium increases in the second quarter were widespread, with two thirds of carriers reporting gains, driven in large part by the employer-paid product lines,” Leary said. “After the past couple of years, our research suggests that employee demand and heightened recognition for the value of life insurance and disability insurance will continue to rise over the next five years. However, a potential recession and other economic factors present headwinds to an otherwise positive outlook.”

Supplemental Health Insurance
Total workplace supplemental health insurance product premium, which includes accident, critical illness, cancer, hospital indemnity insurance, and other health supplemental health insurance products, was $485 million in the second quarter, 9% higher than the same period in 2021.

For the quarter, all supplemental health product lines recorded positive premium growth:  Accident insurance grew 6%, critical illness climbed 8%, cancer insurance improved 9%, and hospital indemnity experienced 10% growth.

New annualized premium for workplace supplemental health products increased 10% in the first half of 2022 to $1.6 billion.

LIMRA’s workplace benefits sales surveys for life insurance, disability insurance and supplemental health represent at least 90% of their respective annualized premium markets.

The latest data table with U.S. workplace sales trends can be viewed in LIMRA’s Fact Tank.