2024 Sees Strong Growth in U.S. Workplace Life and Disability Insurance Premiums
Workplace benefits sales in the U.S. insurance market showed continued growth in 2024, highlighted by a 10% year-over-year increase in new premium for workplace life insurance in the fourth quarter, reaching $925 million. This growth marks the fifth consecutive quarter of rising new premiums, underscoring steady demand despite a slight 1% decline in the number of employer groups offering life insurance. Participation increased by 9%, indicating that more employees are covered under these plans. Term life products dominated sales with over 80% market share, experiencing a 13% premium increase, while permanent life insurance premiums declined by 1%. Overall, workplace life insurance new premium hit a record $4.5 billion for the year, up 8% from 2023.
Disability insurance also expanded, with new premiums rising 12% in the fourth quarter to $1.1 billion. Short-term disability premiums increased moderately by 6%, whereas long-term disability insurance saw a substantial 20% rise. Annually, disability insurance new premium totaled $4.2 billion, reflecting 2% growth, driven largely by a 7% increase in long-term disability premiums offsetting a 3% decline in the short-term segment. Market concentration is notable, with the top 10 carriers accounting for 75% of disability new premiums and generating a 3% gain in 2024.
Supplemental health insurance, including critical illness, accident, cancer, and hospital indemnity products, experienced a 2% decline in new premium during the fourth quarter to $686 million. However, strong performance earlier in the year contributed to overall growth, resulting in an 8% increase to $3.3 billion for the full year. Three-quarters of carriers in this segment reported gains.
These trends reflect employers’ continued use of workplace benefits as a strategic tool to attract and retain talent in a competitive labor market. Enhanced benefits packages are influencing employee retention positively, with over 60% of workers more likely to remain with employers offering strong benefits. The widespread growth is evident across seven out of ten carriers reporting year-over-year increases in sales.
The data emphasizes the critical role of workplace benefits in the U.S. insurance landscape amid evolving workforce dynamics and rising demand for comprehensive health and disability products. These markets continue to adjust and expand, responding to both employee needs and employer strategies to maintain competitive advantage through benefits offerings.