What is the current size of Long Term Disability Insurance and its trajectory?
The 2016 market size for disablitity insurance stood at $29 billion with the long-term disability market accounting for 45.5% of this market, equaling almost $13.2 billion. Although the market has seen steady growth over the last 5 years, it's expected to continue to grow at a slower pace in line with its historical average. However, this market is greatly influenced by external factors with employment levels being one of the most important factors affecting market growth.
The Disability Insurance Industry
This industry underwrites by assuming the risk and assigning premiums of disability insurance policies. Disability insurance insures the beneficiary’s earned income against the risk that a disability will render them unable to find full-time work in their chosen field. However, if an insured individual is deemed capable of working part-time in a different field, they may not realize the full benefit of the insurance policy. The market is basically broken down into two sections: Short Term & Long Term Disability with the later holding a slightly smaller market share.
Market Growth and Trajectory
According to IBIS World, a leading industry report published in August 2016, market size is $29 billion. The market has seen faster than average growth over the last 5 years gaining greater market penetration as awareness of the consequences of disability have fueled growth. Combined with the effect of declining unemployment and other contributing economic factors, we have seen very strong growth in the long-term disability market.
There was a 14% rise over a selected group of companies including Aetna Inc. and MetLife Inc. With other strong market leaders such as Liberty Mutual reporting a 12% growth over the same period. With revenue for long-term disability plans increased 5.1%
and the total number of people protected by 2.4%, the industry has been posting good results across the board. With the market shedding its image of being a complex industry and strong
growth predicted for 2017 the future looks bright for the long-term disability market. Along with continued growth in opening markets and employer sponsored programs helping to push the market growth along.
Forecasting the future growth of the market is dependent on lots of external factors with unemployment rates and key economic factors playing a major role. Market saturation and underlying connected policies also play an important part in forecasting this as this market is affected by multiple and complicated sets of circumstances. However, the consensus is for continued growth with a gradual slow down over the coming years obviously dependent on all external factors being favorable to its growth.
In conclusion, we can state that as of 2016 the long-term disability market share stood at a very healthy figure of $13.2 billion in 2016 with all signs for the continued yet somewhat slowing growth of the market in the next few years. As for the long term predictions past then a lot of factors need to be considered and would be well worth reviewing on a constant basis.