Earnings: Disability Claims Raise Eyebrows

This year, "we continue to see a correlation between incidence levels and the employment growth of our customers," StanCorp President Greg Ness said during a company earnings call.

For groups which have seen moderate employment growth, there has been a minimal increase in claims compared with the claims rate for the comparable quarter in 2010.

For groups with no employment growth, claims increased 11%, and for groups with employment losses, claims increased 15%.

"In response to these recent claim trends, we have taken pricing action to get our profitability back to targeted levels," Ness said.

Price increases on both new and renewal sales have been in the high single-digit range, StanCorp executives said.

"We believe that profitability will improve both as the economy recovers and these pricing actions take hold," Ness said.

Over at RGA, RGA President Greig Woodring was asked about the implications of StanCorp's drop in profitability for the disability insurance reinsurance market during the RGA earnings call.

"There really is not any place we are overly concerned about, nor are we concerned about the profitability of that line as a whole," Woodring said. "So far, the line has performed excellently for us."

Other disability insurance coverage from National Underwriter Life & Health:

• Milliman: Use of Disability Issue Guarantees Grows
• Hartford Finds Group Disability Umbrella Shrinking
• StanCorp: Group LTD Claims Rose
• Long-Term Disability Costs Rise as Claims Fall
• Illinois: Throw Out Old Discretionary Clauses