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Eastbridge’s U.S. Worksite/Voluntary Sales Report finds takeover sales increased again in 2012.

AVON, CONNECTICUT, USA (May 28, 2013)

Based on the most recent U.S. Worksite/Voluntary Sales Report, takeover sales (where one carrier’s plan is replaced with a similar plan issued by a different insurance carrier) now account for 45 percent of new voluntary sales premium reported in 2012, up from 42 percent in 2011. 

“After slowing a bit between 2010 and 2011, takeovers increased in the voluntary market in 2012,” says Gil Lowerre, president of Eastbridge. “While not a surprise that we are seeing more takeovers, it is unfortunate that we saw the growth increase last year.” adds Lowerre.  “As more companies move to a group platform product and Benefits Brokers sell a higher portion of voluntary, we know that competition will increase and more takeovers will occur,” says Bonnie Brazzell, vice president of Eastbridge. 

The following chart shows the takeover rates for the last seven years.

Takeovers as Percent of NBAP

Year

Percent of NBAP

2006

12%

2007

17%

2008

29%

2009

38%

2010

41%

2011

42%

2012

45%

 

“We hope that brokers will recognize all the opportunities for virgin sales in the voluntary market,” adds Lowerre. Today, approximately 32 percent of all employees are already covered by at least one voluntary product. However, that leaves about 68 percent of all employees—roughly 78 million—who do not already own a voluntary product.  All this is virgin business.  The following chart shows the current employee penetration and potential.

Employee Penetration and Potential

 

Percent of Employees

Number of Employees

Current customers

32%

36 million

Potential customers in accounts without voluntary

22%

26 million

Potential new customers in accounts with voluntary

46%

52 million

 

While we expect to see the trend for takeovers to continue, Lowerre believes that there is still a significant amount of virgin business in the market. “Employees often have the need for more than one voluntary product, and many employers continue to be open to adding more types of voluntary products, so brokers do not have to be content with just takeover plans,” adds Lowerre.

The U.S. Worksite/Voluntary Sales Report is an annual report conducted by Eastbridge. The 2012 report includes detailed data on the performance of more than 65 voluntary and worksite carriers, both group and individual. The report is only available to participating carriers. For more information on participating in next year’s survey, 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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