The Outlook for Life Insurance and Disability Benefits

By: Anita Potter, Assistant Vice President, Workplace Benefits, LIMRA and LOMA; Lucian J. Lombardi, Workplace Benefits, LIMRA and LOMA

February 2024

Forecasting is an imprecise science. This is particularly true when it comes to forecasting the post-pandemic economy. Many experts predicted the U.S. would enter a recession in 2022 or 2023, while others predicted the labor market would take years to recover from the aftermath of the pandemic. In fact, the labor force participation rate for prime-age workers has returned to its pre-pandemic levels, and unemployment remains at recent historic lows. Moreover, while the gross domestic product (GDP) struggled for most of the past two years, growth accelerated in the third quarter of 2023 by an annualized rate of 4.9 percent. According to The Economist, “The main thing we got wrong in ... 2023 was being too gloomy ... and the strength of the labor market in America.”

Life and Disability In-Force Premium Outlook

The major economic drivers behind the growth of life and disability benefits in 2021 and 2022 have been the increases in both employment and wages and salaries, as well as overall economic activity. And the impacts of these drivers continued in 2023, albeit at a slower rate.

After posting rapid job growth in 2021 and 2022, job growth slowed in 2023. Even though the labor market softened in 2023, it remained healthy. Moreover, its strength is behind LIMRA’s forecast for a strong finish in 2023. Similarly, while employers increased wages to compete for workers in the tight labor market amid ongoing inflationary pressures in 2021 and 2022, wage growth slowed in 2023. Nonetheless, it was still higher than pre-pandemic levels. It is not surprising that ...

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