Using a proprietary algorithm, RBC Insurance conducted multi-year research that found a strong correlation between GDP rates and long-term disability claims.
“We’ve long been aware of seasonal trends to LTD claims, but what we’ve now discovered is a link between the incidence of claims with the rise and fall of GDP,” said RBC Insurance vice-president, group & business markets John Carinci in a release detailing the findings of the research.
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The study found that as GDP accelerates or the economy grows, there is an increase in the incidence of long-term disability claims.
“Contrary to what many think, the RBC Insurance Group LTD Forecast highlights that LTD claims increase while GDP is rising and the economy is doing better. And when GDP falls, so do LTD claims,” Carinci explained.
RBC Insurance deduced that the phenomenon is similar to a prolonged adrenaline rush that puts stress on the body.
“During challenging or uncertain economic times, workers are worried about job security and performance, creating significant mental and/or physiological stress,” the company said. “As GDP rises and the economic outlook brightens, workers begin to feel more secure and that pent up stress and anxiety takes its toll, which results in them succumbing to illness and taking a leave from work to recoup.”
The study also found that one in three employed Canadians will be off work for 90 days or longer at some point in their career due to disability. Although 72% of survey participants believed that the leading cause of disability is physical or workplace accidents, the study elaborated that a majority of long-term disability claims are stress-induced deriving from mental or nervous system disorders, such as depression or anxiety, or circulatory diseases such as heart attacks.
A release stated that the results of the study, developed over six years, could be used to help predict disability rates up to two years in the future.
“For years we observed cyclical trends with the claims we were seeing but thanks to the team’s efforts and many late nights developing and analyzing the algorithm’s data, we have a much clearer picture around the timing of new LTD claims,” Carinci added. “We’re hoping that by sharing this information we can help employees and businesses proactively manage and prepare for these claims.”
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