The Council for Disability Awareness annual Long Term Disability Claims Review for 2013 report has been released, summarizing LTD claims from 2011 to 2012. In the spirit of learning as much as we can about the large insurance companies that are our daily adversaries, we like to keep an eye on what data they share with each other.
The business of disability insurance enjoys access to an amazing pool of data, from shared resources and government that provides a window into past and future sales.
The report says that while disability claim payments increased slightly to $9.4 billion from 2011 to 2012, fewer companies report increases in the total number of disability claims filed.
To see where this may be headed, consider these numbers:
- 2010 – 56% LTD insurance companies reported an increase in the number of claims filed
- 2011 – 43% LTD insurance companies reported an increase in the number of claims filed
- 2012 – 27% LTD insurance companies reported an increase in the number of claims filed
We know that numbers can be made to say anything. Considering how many workers were laid off from 2010 to 2012, these numbers may reflect that the total number of employed Americans has decreased dramatically, so there are fewer workers to file disability claims. It could also be said that those who are still working are less likely to file for a disability claim, based on the very real fears that once away from the workplace; they may not be able to find employment again.
While the report sings the phrases of an improving economy and declining unemployment rates, it also recognizes that “efforts to help recovering claimants return to work continues to be hampered by limited appropriate employment opportunities….”
We are pleased to see that the number of companies offering long term disability insurance coverage remains steady. Remember, we litigate daily to fight for these benefits for our clients. We have disability insurance, and so do our employees. We know how important it is. We also know that when products become unprofitable, insurance companies are willing to stop selling them – try buying a new Long Term Care insurance policy today.
A few other highlights:
New disability claims are largely coming from workers in the 50-59 age group, with an increase in claims by workers 60 and over.
Women continue to file more disability claims than men, and the percentage of claims by women has continued to be markedly higher than those of men. That may also be a reflection of what has been called the “man recession,” as more women have retained jobs in a more service-oriented economy than men.
The leading reasons for disability claims are musculoskeletal and connective tissue disorders, leading by a large margin. Cancer increased as a cause of new disability claims, and remains the second leading cause of new claims and the fourth leading cause of ongoing claims.
The study asked respondents about their outlook for the future of the disability claims, and the opinions were evenly split as to whether claims levels would return to pre-recession levels, or whether there will be a “new normal” with claims continuing at higher levels than before 2007. Concerns about a low-interest environment, increasing claims and low claim recovery were among the reasons most frequently mentioned as concerns for the future.