Poor risk analysis weighs on Dutch disability market

After an overhaul of legislation in 2006, Dutch insurers eagerly tapped the occupational disability market. But they grossly underestimated the risks and costs of providing cover and have been forced to increase their reserves in response to higher than expected payments. Major insurers are withdrawing from this class of business, and those that are still active are increasing premiums and taking radical measures to control the damage. Hugo Coelho reports

There is trouble afoot in the Dutch partial group disability market. Over the past 18 months, some of the largest Dutch insurers have been retreating from this once attractive class of business after grossly underestimating the risks in the policies they sold.

In late 2012, Delta Lloyd, the sixth largest insurance group in the Netherlands, announced it was withdrawing from the sector after being forced to reserve an additional €60.1 million to cover higher-than-expected claims. Months earlier