Fall 2007 / No. 73
Industry confidence in voluntary market remains positive
Last year, the voluntary market grew at the rate of eight percent over 2005. Growth rates (as measured by the percent increase over the prior year) for the market have increased every year since 2003. And, the latest results of Eastbridge Consulting Group’s Voluntary Industry Confidence Index survey show that those in the industry are still positive about the future for the industry. According to the survey, the mid-year 2007 Confidence Index is at 101.0. While this is down somewhat from the 102.3 at then end of 2006, the current index is very similar to what we saw mid-year 2006, which was 101.2.
The decrease in the index is due to slightly lower results for the overall industry profitability and employee enthusiasm questions. Overall, however, survey respondents remain quite positive about the outlook for voluntary product sales over the next 12 months. Over 96 percent expect sales to increase and 34 percent expect sales to “increase a lot.” No one said voluntary sales would decrease over the next 12 months.
Other good news included in the mid-year 2007 results are:
- Forty-four (44) percent of respondents believe that voluntary carriers (as a group) will be more profitable 12 months from now.
- Eighty-two (82) percent said they expect their company to be either “much more” or “a little more” profitable (up from 80 percent in December 2006).
- Almost half (46 percent) of the respondents expect improvements in worksite/voluntary persistency and retention over the next 12 months (up from 36 percent in December 2006).
- Ninety (90) percent of respondents believe their company will acquire more new groups in 2007 as compared to 2006. This was about the same percentage that we saw in December, but significantly better than what we tend to see in our mid-year survey.
The Confidence Index survey is done semi-annually and looks at how those active in the worksite/voluntary market— carriers, brokers, and vendors— feel about the industry’s outlook for the following year. Like other confidence indices, the Voluntary Industry Confidence Index is a single number that compares the current results to a baseline measure. The first Confidence Index survey was completed in December of 2005; the results from that survey serve as our “base” year (meaning the index was at 100 for that year).
The Confidence Index report is available only to Eastbridge Insight and Information Partner companies as well as to participants. The survey will be conducted again in December of 2007. For more information on becoming a participant, contact the company at info@eastbridge.com.
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