A lot of changes are coming in 2023, and no industry is immune. The disability insurance industry is always in a state of flux, but this year it will see some rather significant changes in trends. These trends are influenced by a variety of factors, such as a shortage of talent, an increase in interest rates, inflation, and even climate change. The best way to prepare for these changes is to keep an eye on the upcoming disability insurance trends each year. We have put together a list of the top trends to look out for in 2023.
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Rising Cost of Healthcare
The cost of healthcare in addition to rising inflation has been a trend over the last several years. For 2023, this will also affect disability insurance costs and coverage. The cost of services has gone up which in turn causes the cost of insurance premiums to rise. This has even effected the cost of own-occupation disability insurance as well. Both employer-backed coverage and individual coverage rates have gone up to the point that most people are cutting back on their disability coverage to compensate.
Innovation and Technology
Technology is advancing at such a rapid pace that it has become harder to predict what innovations lay just ahead. These innovations also include advancements in the disability insurance industry. Machine learning and AI paired with advanced analytics have dramatically changed the way disability insurance claims are processed. Underwriting procedures have been enhanced, and risk assessment is more efficient than ever. There are even advanced IoT devices that are being used to help insurance companies better understand consumer needs.
Mental Health Coming To The Forefront
Mental health conditions are not new, however, the taboo surrounding them has decreased dramatically in recent years. More conditions are being diagnosed than ever and these numbers are expected to continue rising. Mental health conditions often lead to lower productivity at work, and in some cases, can be classed as a disability. Among physicians, depression, anxiety, and burnout are among the chief causes of the decline in professional performance. A growing number of physicians and professionals, in general, have started purchasing long-term disability insurance that offers coverage for MNDA-related conditions.
Increase in Chronic Conditions
According to the CDC, the number of adults suffering from one or more chronic health conditions has increased in recent years. These conditions range from something as common as diabetes to conditions more severe such as cancer. Due to the recent pandemic, chronic conditions have been exacerbated dramatically. This may be due to the increase in medical expenses, or the fear of exposure to Covid, however, the results are the same. As chronic conditions increase, so does the demand for disability insurance among all sectors. Those suffering from chronic illnesses are more likely to miss work, which has led to an increase in claims in 2023.
The disability insurance landscape is consistently on the move and the best way to ensure that you stay informed is by researching trends. For insurance providers and consumers alike, adapting to the rapidly changing market is critical for both enduring adequate coverage and managing expenses. We have highlighted the top four trends in the disability insurance sector to keep in mind. However, trends remain fluid so make sure to keep an eye on the market for up-to-date information in the field.
Author Bio: Liam Hayden has an MBA in Financial Management. He was born in San Francisco and has lived most of his life in Los Angeles. With 5+ years of experience in the finance industry, he is passionate about topics such as budgeting, investing, insurance, credit, and taxes. To unwind from his stressful job as a 33-year-old middle manager, he enjoys beaches, meditation, and painting.