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Also in this issue:

• Variable Deduction Loads
  
• Medical Brokers Begin to Explore Voluntary Market
  
• Products and Penetration Rates
  
• Incremental vs. Exponential Growth
  
• Voluntary Sales and the “R” Word
  

• Who is Minding the Customer?

• How Do Your Web Capabilities Stack Up?

• Look for our New Spotlight Report on VSTD Products
  
• Specialty Markets – What Works?

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Spring 2008 / No. 75

Products and Penetration Rates

By Gil Lowerre

We have regularly published results showing that participation varies dramatically (although within ranges) based on the enrollment process used. But there are always outliers, usually involving low-participation methods yielding very high participation results in specific circumstances. There are two probable reasons for such discrepancies: differences in how any one enrollment method is actually implemented and the product(s) that are enrolled.

Attempting to quantify the impact of these two forces on participation rates is difficult for a variety of reasons. Specifically:

• Most carriers do not keep track of these types of variables.
• Different combinations of products are enrolled, sometimes without the carrier knowing it (a broker who enrolls two products from two different carriers).
• Product definitions, platforms and forms make clean distinctions difficult.
• Enrollment methodologies are rough approximations. There are wide differences between the way enrollment is done (even within a method): mandatory vs. voluntary meetings, amount/type of pre-enrollment marketing and communication, contract vs. in-house enrollers, enrolled with core or through a separate process, on- vs. off-cycle, company locations, etc., etc.

But there is a body of anecdotal evidence from carriers, brokers, and enrollers that can be used to propose a few theories.

• With high-demand products (dental, vision), we expect relatively high participation regardless of the method, suggesting that a group or distance method is most efficient.  
• Low-demand products (HI, cancer, accident) would likely show that a high-touch method would be most successful (face-to-face/one-on-one, outbound telephonic).
• Complex products (LBMP, critical illness) benefit from a more extensive communications process, either delivered through a high-touch method and/or, (in specific situations) through a very well organized communications campaign.
• Products ranging in the middle of the demand priorities list (STD, LTD, VTL) will probably reach higher participation levels with a high-touch enrollment method, but the differential will be less than with the low-demand products.

If we want the highest participation rate at the most efficient cost, we need to look at method, product, and the way both will be implemented before deciding on the “right” way to proceed.

Contact Eastbridge for more information on evaluating your company’s products and processes relative to participation rates.