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Also in this issue:

• Cover
• The Evolving Voluntary Broker By Bonnie Brazzell
• Improving Worksite Persistency (Part II)
  By Gil Lowerre
• Discount Research Programs
• Voluntary is Becoming the Primary Delivery System for Financial Services
• Beating the Banks to the HSAs
• The 2020 TPA
• Voluntary Industry Confidence Index
• Takeovers – Is this a good or bad thing for the industry?
• 2006 Industry Snapshot and Competitor Profiles Now Available

Past Issues

• 2007
• 2006

Fall 2006 / No. 69

Voluntary Industry Confidence Index

The voluntary/worksite industry confidence index is up, that according to the mid-year Worksite/Voluntary Industry Confidence Index survey conducted by Eastbridge. The index for mid-year was 101.2.

The study includes responses from individuals active in the market and includes carriers, brokers, and vendors. Like other confidence indices, the Voluntary Industry Confidence Index is a single number that compares the current results to a baseline measure. For our purposes, the December 2005 results are our baseline. This means that in December of 2005 the Voluntary Industry Confidence Index was 100.

Overall, prospects for the industry remain positive. In fact, 93 percent of those participating in the Confidence Index survey expect sales to increase over the next 12 months. Additionally, 70 percent of respondents believe that employees will be more enthusiastic about voluntary benefits 12 months from now. Expectations for sales stayed pretty consistent with the December results, but the results for employee enthusiasm were up slightly from the 68 percent last time.

The overall increase in the index is largely due to the more positive results (based on means) for the industry profitability and employee enthusiasm questions. Seventy-three (73) percent expect profitability to increase and just two percent expect profitability to decrease (compared to 10 percent in 2004). Most of the respondents also believe that persistency levels and retention for voluntary business will either improve slightly (40 percent) or remain the same (44 percent) over the next 12 months.

Most (79 percent) respondents also believe that their company will acquire more new groups over the next year than they did in 2005. This number was down slightly from the December index primarily because fewer respondents believe that new group sales will ‘increase a lot’ (43 percent compared to 30 percent).

We, at Eastbridge, expect sales to continue to grow at the mid-to-high, single-digit level. Changes in the marketplace, in consumers, and in the likelihood that most employees look to the worksite to purchase more of their insurance products will fuel the movement to more voluntary benefits and to more producers selling voluntary products.

The Worksite/Voluntary Industry Confidence Index, a Frontline Report, is published semi-annually by Eastbridge Consulting Group, Inc. Our next survey will be out in early December. All participants get a free copy of the report.