Historically, Conning said, disability insurers faced higher losses in periods of sustained economic turmoil, and have also been adversely impacted by reduced levels of investment income.

"Consumer awareness and attitude are focused on life and medical insurance and retirement planning, not disability income protection," said Jim Smith, assistant vice president at Conning Research and author of the study.

"Low consumer awareness has hampered sales, particularly to medium- and small business and their employees," he added. "Group disability writers have not effectively penetrated these segments because smaller businesses are not hearing pressure to do so from their employees."

But Conning said the risks for consumers are real. Conning said the study found that 30-year-old women have a 57 percent chance of becoming disabled and only a 16 percent chance of dying before age 65. Yet female employees often overlook the need for disability income benefits, asking instead for improved medical and life insurance benefits.

The ever-changing legal definitions of what constitutes a disability will impact disability insurers as well, Conning said.

Stress-related disabilities, related to Sept. 11 or otherwise, are becoming more common, Conning found. Disability advocacy campaigns and recently passed laws, such as the Americans with Disabilities Act, have sensitized employers to disability issues and made them more accepting of mental health conditions as well as physical ailments, according to the researchers.

Disability insurers face these challenges in the context of an extremely concentrated marketplace, Conning said. The five-largest insurers accounted for more than half of the industry's written premium in 2000.

Conning Research suggested that successful disability insurers will focus on four critical success factors:

? Product enhancement and underwriting improvement.

? Improved marketing strategies and distribution mediums.

? Improved and expanded case management.

? Prudent investment and expense management.