Annual Eastbridge worksite sales
study
estimates business from takeovers
AVON, CONNECTICUT, USA (June 28, 2007)
Worksite sales
for 2006 were an estimated $4.715 billion, according to Eastbridge
Consulting Group’s annual U.S. Worksite
Sales Study. This represented a growth rate of about 8 percent over 2005.
“Many in the industry have wondered how much of the business
we write each year is actually new business versus takeover business
(where one company is replacing or taking over voluntary business
from another carrier),” says Bonnie Brazzell, vice president
of Eastbridge. Until now, there have not been any estimates on
this.
This year the Eastbridge survey asked carriers what percentage
of their sales (i.e., new business annualized premium or NBAP)
are generated from takeover cases. “Many carriers do not
track this and so really had no idea,” says Gil Lowerre,
president of Eastbridge. About a third of the carriers in the
study were able to provide this data. The average percentage
reported was 20 percent, but many responses were significantly
higher.
“To arrive at our estimate, we applied the percentage
for each of the reporting companies against their NBAP and then
divided the overall result by the total NBAP represented by these
companies,” says Brazzell. “We then analyzed the
rest of the carriers (that do not currently track this information)
by the type of company and their target market as well as product
portfolio.”
Using this approach, Eastbridge estimates that roughly 12 percent
of the NBAP this year was takeover premium. “We know that,
because of the limited sample size, this data may not be 100
percent accurate. But it is the first and only estimate on the
degree of impact takeovers are having on the voluntary market
today,” adds Lowerre. “We will continue to analyze
and report this information in future sales study in hopes of
uncovering possible trends.”
The U.S. Worksite Sales Study is an annual report conducted
by Eastbridge for the past seven years. The most recent report
(2006) includes detailed data on the performance of 61 worksite
marketing carriers, both group and individual, and represents
the largest number of carriers included in any sales report for
the industry. The report is only available to participants. For
more information, contact Eastbridge at info@eastbridge.com or call
(860) 676-9633.
Eastbridge Consulting Group, Inc. is a marketing advisory firm
serving insurance and financial services organizations in the
United States and Canada.
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