RGA Survey Results: Underwriting Practices and Product Features for Group Critical Illness Coverage Continue to Liberalize
September 05 2017 - 9:00AM
Business Wire
Second Biennial Survey Examines Practices Among
Major Group Insurance Carriers
RGA Reinsurance Company, a subsidiary of Reinsurance Group of
America, Incorporated (NYSE:RGA), today announced results for the
second edition of the Critical Illness Underwriting Practices for
Employer Groups survey. In recent years, critical illness has been
one of the fastest growing voluntary products, and RGA’s survey
reveals a continued trend toward liberalizing certain underwriting
practices and product features.
Twenty-one group insurance carriers who currently offer group
critical illness in the United States responded to the survey,
which gathered data on carrier practices, including plan design
trends, guaranteed and maximum issue limits, underwriting
guidelines, participation rates, eligibility requirements, standard
commission structures and rate guarantees.
Survey highlights include:
- Pre-Existing Conditions
Limitation: Three-quarters of respondents said they have
experienced an increase in requests to waive pre-existing condition
limitations. This liberalization is notable, as several respondents
specifically mentioned reducing or waiving the pre-existing
condition provision as one of their top three critical illness
market trends of most concern.
- Private Exchanges: Two-thirds of
carriers offer critical illness coverage via private exchanges in
addition to traditional platforms.
- Enrollment Practices: In
contrast to 2015 survey results, carriers note that open enrollment
with guaranteed issue is standardly offered to all employees and
dependents for new business, and two-thirds of carriers standardly
offer the same for renewals. Nearly half of participating carriers
offer open enrollments with guaranteed issue to accommodate private
exchange and enrollment platform requirements.
- Recurrence Benefit: Once thought
of as an optional benefit, recurrence is now viewed as a policy
standard. Survey results indicate lower recurrence benefits may
also be a thing of the past as offering full benefits for
recurrence is on the rise.
- Lifetime Maximum Benefit: Almost
half of the carriers no longer have a lifetime maximum benefit
amount. Of those that have a limit, 50% include a 300% - 500%
maximum benefit.
“The liberalization of product features and underwriting
guidelines is not a complete surprise,” said Mary Johnson, Senior
Marketing Underwriter at RGA. “We’ve witnessed the expansion of new
covered conditions in virtually every country where critical
illness is sold. However, market pressures in the U.S.,
including the ACA and high deductible plans, are unique, and we are
seeing liberalizations not seen elsewhere. While no single aspect
of the current trend is overly troublesome on its own, we believe
the compounding effect of relaxed guidelines and practices pursued
simultaneously is cause for concern. As more carriers expand
product portfolios to include critical illness insurance, it has
created a ‘me too’ market to some degree. One positive trend noted
in the survey is GI limits generally remained the same.”
The Critical Illness Underwriting Practices for Employer Groups
survey is a biennial benchmarking survey produced by RGA. Full
results, including participation levels, GI/MAX amounts, and
carrier perspectives regarding top market trends of concern, are
made available only to participating companies. To view additional
commentary about the survey results, visit rgare.com.
About RGA
Reinsurance Group of America, Incorporated (RGA), a Fortune 500
company, is among the leading global providers of life reinsurance
and financial solutions, with approximately $3.2 trillion of life
reinsurance in force and assets of $58.1 billion as of June 30,
2017. Founded in 1973, RGA today is recognized for its deep
technical expertise in risk and capital management, innovative
solutions, and commitment to serving its clients. With headquarters
in St. Louis, Missouri, and operations in 26 countries, RGA
delivers expert solutions in individual life reinsurance,
individual living benefits reinsurance, group reinsurance, health
reinsurance, facultative underwriting, product development, and
financial solutions. To learn more about RGA and its businesses,
visit the company’s website at rgare.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20170905005628/en/
RGA Reinsurance CompanyLizzie Curry, 636-736-8521Public
Relations Managerlizzie.curry@rgare.comorLynn Phillips,
636-736-2351Vice President, Corporate
Communicationslphillips@rgare.com
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