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A.M. Best Special Report: Social Security Disability Insurance Insolvency: Potential Threat or Opportunity for Insurers?
A.M. Best has released a new special report that explores the potential impact to disability insurers should there be any disruptions to the Social Security Disability Income (SSDI) fund, which is projected to be depleted in 2016. The Best’s Special Report, titled, “Social Security Disability Insurance Insolvency: Potential Threat or Opportunity for Insurers?” also highlights some opportunities to carriers, including automatic enrollment or making disability coverage a mandated benefit or privatization of the claims adjudication process. A significant driver of the projected insolvency is the material rise in applicants (and their dependents). While the awarded rate has steadily declined —to 31.4% in 2012 from 56.0% in 1999 —the total number of awarded applicants has been on a variable trend with year-over-year growth rates ranging from a peak of 14.2% during the recession in 2009 to a 15.7% decline reported in 2012. This has ultimately led to an increase of total awarded applicants, as applicant growth has outstripped the declining approval rate. The number of applicants has more than doubled since 1999. Read more…