Summer 2007 / No. 72
The largest brokers in the United States are beginning to embrace voluntary coverages, but a recent Eastbridge study of 25 of the largest 100 firms showed disappointing results.
Like all brokers, the largest firms are being attracted by the growth in voluntary. The attached chart shows the inroads voluntary has made into all forms of traditional benefit designs. And watching the yellow and green bars march to the left year after year leaves no doubt as to how this game will end. The blue bars (and some green) are where the traditional firms live. Of the twenty-five firms in our study, if you exclude six that have some focus on voluntary, the rest average only 3% of their benefits sales from voluntary coverages.
The largest firms know this is happening.
Of all 100 top firms, 94 percent currently offer voluntary products and only two companies have no plans to offer them in the future .
But they don’t know how to go about it.
Of the 25 firms in the detailed study, only six sell more than $1 million in voluntary premium. But these high-selling voluntary firms are much more likely to have voluntary sales goals, dedicated staff, and high benefits sales as well as high voluntary sales. They averaged $17 million in voluntary premium sales,11% of their total benefits sales.
The others were doing almost nothing. Those that knew their results averaged $400,000 in voluntary sales. Nine didn’t have any idea. Of the 19 low-selling voluntary firms, one had a formal voluntary goal, and only three had any staff dedicated to supporting voluntary. In short, they have no strategy for voluntary--and the results show it.
What does it mean?
Possibly, firms understand that the shift is taking place but don’t realize that voluntary is different and that it takes a concerted, separate effort to be successful. That would explain the lack of developed voluntary strategies and structures. Or maybe they understand they need to do something different, but don’t know how to go about it.
In either case, these large firms have tremendous potential and those that can help them achieve it stand to benefit.
To evaluate your voluntary strategy, contact one of our worksite consultants at (860) 676-9633 or email them at info@eastbridge.com.
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