The disability insurance landscape has experienced drastic changes in the last few years. The changes have led to new opportunities, as well as challenges for insurers. As the industry evolves, some issues will dominate the conversation in 2023. Let's explore these topics and discuss how they affect the disability insurance space.
The BLS (Bureau of Labor Statistics) shows that the median age of workers in the US is slowly rising, with people retiring later in life. This means that older workers are outnumbering younger employees.
Projections show that more than 25% of the workforce will be over 55 by 2024. Over the last few years, more people are opting to stay in the workforce rather than retire. This increase in older workers brings new concerns for disability insurers, such as higher claims rates due to aging health and lifestyle choices.
It’s up to insurers to find ways of mitigating risks related to an aging workforce while still providing coverage that meets their customers' needs.
Rising Healthcare Costs
Data from CMS (Centers for Medicare & Medicaid Services) shows that National Health Expenditure is steadily increasing. In 2021, total healthcare spendingin the US reached $4.7 trillion—a 2.7% increase over the previous year.
Insurers are now tasked with finding ways to keep costs down while providing competitive coverage to their customers. Given the rising cost of care and treatments, this can be challenging. Insurers need to stay up-to-date with the latest healthcare trends and create policies that meet their customers’ needs while keeping costs low.
Increase in Chronic Conditions
Long-haul Covid, heart disease, stroke, cancer, diabetes, and arthritis—are just some chronic conditions impacting people today. The Centers for Disease Control (CDC) reports that 6 out of 10 adults in the US have at least one chronic condition.
These conditions can significantly impact disability claims, as they will often require long-term care or treatments. Insurers need to be aware of this increase in chronic diseases and adjust their coverage accordingly.
Increase in Mental Health Conditions
The push to include mental health coverage in disability insurance is gaining momentum. Therefore, insurers need to develop policies that cover mental health issues, as well as physical conditions.
The state of mental health in the US is a complex issue. Covid-19, social media, and low community involvement contribute to a rise in mental health concerns. The increase has necessitated a change in the way insurers approach disability coverage.
Use of Technology in the Space
Insurers are now leveraging technology to make their policies more accessible and user-friendly. Enrolment tech streamlines customer onboarding while also providing an easy-to-use platform for policyholders.
Apart from that, insurers are also using apps and websites to connect customers with doctors and healthcare providers. This helps customers get the care they need faster and more efficiently.
Overall, technology is helping insurers make their policies more accessible to customers while providing a better customer experience.
Disability insurance is an ever-changing industry that requires constant evaluation and adaptation to new trends. Most importantly, insurers must stay up-to-date with the latest advancements and provide policies that meet their customers' needs while keeping costs low.
In 2023, insurers have a lot to consider when it comes to disability coverage. From an aging workforce to rising healthcare costs and an increase in chronic conditions, insurers must design policies that help protect their customers and mitigate risks. They also need to consider the use of technology to improve customer experience.