Winter 2007 / No. 70
Confidence in the voluntary market
is up!
Eastbridge has just finished analyzing the results
of the latest Voluntary
Industry Confidence Index survey and found that you are
more positive about the future for the industry in 2007 than
you were in 2006. According to the latest survey, the index
is at 102.3, which is an increase over the mid-year results.
We completed our first Confidence Index survey in December
of 2005 and conduct it twice each year. The results from last
December serve as our “base” year (meaning the index
was at 100 for that year). For mid-year 2006, the index was at
101.2.
The increase in the index to 102.3 today is largely due to the
more positive results (based on means) for the industry’s
sales expectations for the next 12 months, as well as slightly
higher expectations for profitability. Employee enthusiasm regarding
voluntary (another component of the index) was stable and showed
no significant change in the most recent survey.
Survey respondents were very positive about the outlook for
voluntary product sales with over 98 percent expecting sales
to increase over the next 12 months. Twenty-eight (28) percent
believe that sales will “increase a lot.” We also
saw fewer respondents saying that sales would either
“stay the same” or decrease in 2007.
When asked if voluntary carriers (as a group) will be more profitable
12 months from now, 43 percent of the respondents answered “a
little more” profitable. This was slightly higher than
the 40 percent from the mid-year survey. Another 10 percent expect
the industry to be “much more” profitable. The total
percentage of respondents expecting higher profitability was
53 percent, the highest percentage of any of our surveys. (In
July of 2006 the percentage expecting higher profitability was
49 percent and in December 2005 it was 50 percent).
Respondents also expect premium rates for voluntary to either
stay the same (50 percent) or even decrease (12 percent) in 2007.
In the most recent survey, we saw a decrease in the percent of
respondents believing that premium rates for voluntary lines
will increase in the next 12 months. Today, only 36 percent believe
that increases are likely compared to 44 percent mid-year 2006
and 51 percent December of 2005.
The Voluntary Industry Confidence Index report is free of
charge to all Eastbridge Insight and Information Partner Companies
as well as to participants. The survey will be conducted again
in July of 2007. To make sure your company is invited to participate,
send your contact information to info@eastbridge.com. |
