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Also in this issue:

• Cover
• Voluntary strategy and the largets U.S. brokers
• The distributor of the future
• Don’t ruin your client’s HSA
• 2006 – A very good year for voluntary sales
• 2007 voluntary sales growth leaders
• Eastbridge has a new, improved website!
• Predictions by Eastbridge Consulting Group echoed in recent ERISA Industry Committee proposal
• Too many choices or too little advice—the dawning of the Age of Confusion
• Takeovers in the voluntary market
• Critical Illness—what’s taking so long?
• Can technology drive the bus?

• Too many group companies don’t “get” enrollment

Past Issues

• 2007
• 2006

Summer 2007 / No. 72

2006 – A very good year for voluntary sales

Voluntary sales growth accelerated again in 2006, the third straight year of increasing growth rates. Since Eastbridge first published detailed results in 1999, the industry has never had a year with declining sales. Since 2003, the growth rates have increased each year (as measured by the percent growth over the prior year). The last year that growth rates, while still positive, were below the previous year was in 2003. Since then, sales growth has been both positive and increasing each year. The sales growth rate for 2006 reached eight percent, making voluntary/worksite sales one of the fastest growing segments of the insurance industry. Total worksite sales for 2006 are estimated at $4.715 billion. In addition:

• Just 20 companies out of the 61 in our sales study had decreases in 2006.
• Most carriers that had increases reported double-digit sales growth.
• The sales growth for the top 15 companies as a group was 10 percent over the 2005 figure.

Many product lines also saw solid growth in 2006, with voluntary disability sales showing robust growth. Total disability sales were over $1 billion last year, an increase of 25 percent over 2005 levels. In fact, disability moved ahead of life insurance in 2006 in terms of overall market share (23 percent vs. 21 percent). Other lines with strong, double-digit sales included cancer and hospital indemnity/voluntary medical. In 2006, the cancer line also grew at about 25 percent while the hospital indemnity/voluntary medical line grew at 12 percent.

By distribution segment, we saw the greatest increase in new sales from the Career Agent segment. This is a rebound from the decrease we saw in 2005. The positive sales results posted by both Aflac and Colonial are likely strong contributors to this increase. The Benefit Broker segment saw almost a 10 percent increase. The Classic Worksite Broker segment increased at about 5 percent, while the Specialists were about level with 2005.

Finally, inforce premiums increased by about 10 percent in 2006 to bring total inforce to $19.5 billion (based on our high estimate).

While some are seeing a glass half empty when looking at 2006 results, we see the glass as being rather full!