In a pioneering study conducted by Canada’s RBC Insurance, a link has been found between long-term disability (LTD) claims and GDP. The link is counter-intuitive, showing that long-term disability claims actually rise with economic growth. When GDP falls, LTD claims do as well.
It may seem odd to find claims increasing when economic times are good, but RBC Insurance believes it’s a similar phenomenon to adrenaline rush stressing the body.
“During challenging or uncertain economic times, workers are worried about job security and performance, creating significant mental and/or physiological stress,” RBC Insurance said in a statement. “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.”
As with the United States, most LTD claims are related to stress, including mental and nervous system disorders like depression and circulatory disease like heart attacks and stroke, not workplace accidents and physical impairments as many believe.
The correlation was found after studying six years’ worth of data from more than 300,000 group benefit clients. RBC Insurance says it’s created an algorithm for companies to predict disability rates up to two years ahead.
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