Spring 2008 / No. 75
Specialty Markets – What Works?
Eighty-four (84) percent of the carriers responding to the recent Eastbridge Frontline Report, Specialty Markets and Voluntary/Worksite Carriers, said that their company does some business through specialty markets. The specialty markets included in the survey are:
- Associations of employers
- Associations of individuals
- Banks
- Credit unions
- Employee leasing organizations/PEOs
- Labor unions
- Public sector
According to the carriers responding to the survey, associations of employers was the most commonly pursued of the specialty markets followed by public sector markets. But while there are many carriers pursuing these markets, most do not get significant sales from them. Thirty-eight (38) percent said that the markets account for five percent or less of their voluntary sales. In terms of actual sales or premium, results were mixed. Over half said they generate over $5 million in sales from all specialty markets. However, a quarter gets only $500,000 or less.
While more carriers pursue associations of employers than any other market, it is not the specialty market that accounts for the largest share of sales for most carriers. Public sector won out by a margin of 3 to 1 as the largest specialty market. Not surprisingly, carriers pursuing the public sector market were more likely to get a higher percentage of their total sales from this market than those pursuing the other specialty markets and are much more likely to say that the market is “extremely” or “very” important to their company’s overall marketing efforts. None of the companies that said employer associations were the largest said the market was “extremely” or “very” important to their efforts.
Based on the report, it appears that the public sector market is a specialty market that “works” for many carriers. Additionally, the association market is one that carriers would like to figure out and take more advantage of.
Eastbridge is currently preparing to conduct an in-depth study of the association market. For more information on how you can participate, call us at 860-676-9633.
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