Long-term disability claims are expected to fall by 3.6 per cent in 2019 compared to 2018 due to a slowing Canadian economy, according to research by RBC Insurance Services Inc.
Since LTD claims impact both employees and business owners, knowing where these trends are headed can help employers plan for and manage costs related to claims and ensure they have adequate staffing, the report noted. It’s also an opportunity to ensure employees get the support they need so they return to work healthy and productive, allowing businesses to get back to normal operations efficiently, it said.
Using a proprietary algorithm that can make predictions in LTD growth, RBC Insurance discovered claims are linked to gross domestic product growth rates. When growth is forecasted to decelerate, there’s a corresponding decline in LTD claims, the research found.
The model was successful in predicting year-over-year increases in 2017 and 2018, relatively close to the actual rate experienced. “While still elevated on an overall basis, 2019 nonetheless marks a directional shift after two consecutive years of growth,” said John Carinci, vice-president of operations and client experience at RBC Insurance, in a press release.