7% rise falls short of previous 5 years double-digit track record
By Trevor Thomas
New insurance sales made to U.S. workers at their places of employment rose 7% to just over $4.3 billion last year, the first time in 6 years that the worksite employee benefits industry failed to show less than double-digit growth.
In contrast, the 2002 figure of $4 billion in new sales was up 15% over 2001 and was the 5th straight year of double-digit increases in worksite business, according to a report by Eastbridge Consulting Group, Avon, Conn.
Eastbridge executives blamed the slowdown on sales fluctuations among a few key players in the market. “If you pulled them out [of the data], most every other number would have been the same as before,” says Bonnie Brazzell, vice president of Eastbridge.
Despite the general slackening, a number of companies had strong increases in 2003, she says.
For example, one of the top 15 experienced nearly a 200% increase over its 2002 results, while 3 others in this top group saw sales growth of more than 20%, Brazzell says.
“Several of the top players had slower than normal years in 2003, but we expect them to be back in the double digits for 2004,” adds Eastbridge president Gil Lowerre.
Life insurance led among voluntary benefits, with about 25% of sales, up 11% from 2002. Voluntary term life sales accounted for about 54% of that volume, according to Eastbridge.
Disability insurance, which last year was first in worksite sales for the first time, dropped back to second place with 23% of sales. Sales of both short- and long-term disability products still gained more than 5% over 2002.