product spotlight | disability income insurance Trends Affecting the DI Market Today

Streamlined underwriting platforms have allowed insurers to effectively market more affordable programs and expand their reach to Middle America.

By Joe Russo

According to last year’s Milliman survey of the industry, the disability income (DI) insurance marketplace is thriving and stronger than it has been in 20 years. Much of that success is partly due to the relatively soft DI market and the slowly increasing number of life companies that are expanding their portfolios and offering more DI insurance products.

Low interest rates and mediocre investment opportunities are forcing many insurers to battle for higher levels of gross premium. Consumers, whether they know it or not, are experiencing carrier competition that is generally driving DI insurance policy premiums lower and pushing benefits and participation limits higher along most underwriting categories. DI insurance underwriting is more liberal today than it has ever been, and we are seeing new trends affecting the market.

Today’s trends

Insurance companies have traditionally catered to preferable risk selection among classes like physicians, attorneys and the high-end, white-collar market. But DI insurance carriers have begun to expand their marketing reach to Middle America and are finding profitability in the more recently-defined and greatly-expending, gray-collar sector. Streamlined underwriting platforms have allowed insurers to effectively market more affordable insurance programs to occupation classes that in the past would usually balk at DI insurance premiums. Much of that streamlining directly correlates to technology evolution and advances in automation.

Embracing contemporary technologies, DI insurance carriers are finally making some inroads into the rest of the insurance industry by exploiting client receptiveness to digital advertising and social media marketing. Gimmicks like smart-phone apps and insurance calculators have become commonplace. And companies are beginning to offer user-friendly, online-enrollment platforms that provide quicker and easier underwriting and policy issuance.

Carriers and wholesale distributors are also working to make DI insurance sales more attractive to brokers and agents by putting quoting engines and policy comparison software in their hands. But many of these novel tech advances have also broken down barriers between insurance companies and the end-line consumer, allowing for increases in direct marketing and sales, which further weakens the traditional roles of independent insurance agents in this country.

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