Winter 2007 / No. 70
For almost a decade, we have published annual industry voluntary
sales by carrier (The U.S. Worksite Sales Report), the
definitive ranking of all voluntary (employee-paid) sales. The
total number of companies has remained relatively stable, but
individual company results have jumped around over the years.
But throughout that period, roughly 40 percent of all sales have
come from a small group of leading companies.
When we started the survey, the leaders were the traditional
worksite companies: Aflac, Colonial, Allstate (American Heritage),
AIG (American General), and American Fidelity. Today, three of
those companies remain among the leaders (Aflac, Colonial, and
Allstate) while others (MetLife, Hartford, and Unum) have entered
this elite tier of carriers.
Why have some been able to remain leaders year after year while
others have slipped down in the rankings? The first answers that
come to mind don’t really explain their success.
Agency Force Distribution
It’s easy to point at Aflac and Colonial and declare that
an agency force guarantees success. But a more thoughtful reaction
is that there are plusses and minuses to an agency force, and
the ability to leverage an agency force is more important than
simply possessing one. During the period, one agency force company
fell out of the leadership rankings and several non-agency companies
entered. An agency force offers great advantages, but it has
drawbacks and is no guarantee of long-term success.
High Compensation and/or Product Excellence
You would think that a perennial leader would need excellent
products and/or high compensation. And yet, only one leader is
a top commission company while few are product leaders.
Portfolio Breadth
It is true that most leaders offer a broad voluntary portfolio
of products, which no doubt helps them retain their ranking.
But there are dozens of companies with broad portfolios that
are not leaders.
While all three characteristics are important and helpful, they
do not explain the ability to remain sales leaders. So what do
they have in common?
Clarity
Everyone knows Aflac, Colonial, and Allstate. Some producers
love them; some don’t. But no one is unsure about who they
are and what they stand for. Perennial leaders understand themselves,
their strengths and weaknesses, and their position in the marketplace.
And based on that, they offer clear value propositions to producers.
You know what you’re getting. Looking at all of the current
leaders, some offer high touch, complete packages, while others
offer limited services. They focus on different types of brokers
and different size cases and have different product and operational
philosophies. But the offering is clear, the “deal” is
reasonable for some producers (and not for others), and there
are few surprises once you’re doing business with them.
Consistency
The second key is that the offering remains relatively stable
over time. Aflac, Colonial, and Allstate may change tomorrow,
but to date, their basic value proposition has not changed much
over the years. Products and services evolve, but the value proposition
remains stable. Producers know what to expect of these carriers
today and, historically, could expect to receive the same tomorrow.
These seem to be the commonalities of the perennial leaders.
And conversely, you can see that companies that have dropped
out have had problems with clarity, or consistency, or both.
Product leadership, high commissions, and career agents are important
strategic elements, but producers select carriers whose value
proposition meets their needs, whose deal is
“fair,” and who they believe will stay the course
as they go forward.
For information on how Eastbridge can help you develop clarity
and consistency, call us at (860) 676-9633.
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