Although sales growth for voluntary employee benefits has slowed in the past two years, a number of worksite product manufacturers still report double-digit growth.

Data from Eastbridge Consultants show voluntary sales grew to about $4.4 billion in 2005, the latest year for which industry-wide figures are available. That’s a growth of only around 3.4% over 2004′s $4.2 billion.

Growth for the industry as a whole has slowed for the past 3 years, primarily because a few key players experienced sales declines, reports Eastbridge, which did not identify those companies.

By the same token, a number of carriers tell National Underwriter they exceeded the industry growth averages substantially in 2006 for a number of voluntary benefits.

For instance, Colonial Supplemental Insurance reports sales growth of 12.7% for the first 9 months of 2006, with third quarter sales growth of 17.8% over a year earlier.

“Sales are great,” says Tom Gilligan, senior vice president of marketing & branding for Colonial Supplemental, a marketing brand of Colonial Life and Accident Insurance Company, Columbia, S.C. “We were in the single digits last year but hope to maintain double digits right through the next. I think we’ve got good momentum. Our sales organization is doing a good job, and our products are doing well, particularly short term disability and group life insurance.”

The key for Colonial has been more about strengthened distribution rather than new products, Gilligan says. He explains his company has boosted recruitment of sales managers, agents and new brokers.

UnumProvident Corp., Chattanooga, Tenn., has seen steady worksite growth in the past year ranging between the mid-teens and 20%, reports Mike Simonds, vice president, market development.

“The most significant growth has been in the small employer and mid-market–under 2,000 employees,” he says. “But we’ve seen sales growth across all market segments. It has been strongest in our supplemental health products like critical illness, accident and supplemental hospital indemnity.”

One trend that he believes has spurred this year’s growth: Employers increasingly see voluntary benefits less as an add-on to their plans and more as a mainstream product. Simonds expects that development to continue next year:

Randy Stram, vice president, institutional business, Metropolitan Life Insurance Company, New York, also expects significant growth in the voluntary market segment next year. “It has been one of fastest-growing lines in our institutional unit,” Stram says. “It has been growing in the neighborhood of 5% to 10%.”

Voluntary dental and critical illness have been among the hottest products for MetLife, along with group auto and homeowner policies and prepaid legal services, he says.

Voluntary life, disability and long term care also did well, while increasing numbers of employees have been signing up for the company’s annuities and MetLife Bank, Stram reports.

He expects significant growth in 2007 in packaged benefits.

“Historically, employers would implement a single voluntary product at a time and would pick whatever made sense in a given year,” Stram says. “Now there is a significant shift toward picking suites of benefits. MetLife is offering all voluntary benefits in a platform that allows employers flexibility to pick what makes sense for populations or individual circumstances.”

Offering worksite benefits through a packaged platform makes it easier on the employer, Stram says. For employers going this route, MetLife offers its MyBenefits Web site, where employers can select from all the MetLife products an employer offers.

“I firmly believe voluntary benefits will continue to grow at a rate that eclipses employer-paid benefits,” Stram says. “I know from our own trend studies that more than three-quarters of employers believe the fight for talent will intensify over the next 18 months, and they will use benefits programs to attract and retain people.”

Lance Osborne, vice president of field force development for AFLAC, Columbus, Ga., agrees that more employers are looking to benefits to help in recruiting and in maintaining morale.

Osborne reports that AFLAC has seen sales exceed its projections for this year, particularly for its most popular lines, accident and disability products. “Employees are looking for living benefits that help protect their lifestyle,” he says.

Part of the growth has come from the company’s recent expansion of its sales force, he says. AFLAC has also striven to improve the quality of its salespeople by expanding training, he says.

The company also recently reorganized its marketing department, hiring a senior vice president of marketing, Jeffrey Herbert, with responsibility for product and market development and market research, explains Osborne.

In addition, the company has launched a number of programs to reach out to the Hispanic business community, including a civic awards program to provide recognition for Latino business owners in 6 cities, he explains. “It’s a growing and emerging market, and AFLAC wants to be sure to be aligned with that community,” he says.

The big challenge facing voluntary benefit sellers now, he adds, is to educate consumers, since many don’t fully understand their benefit options, such as consumer-driven health care plans.

“It’s shocking how many people choose higher-priced PPO plans, and that’s because they don’t understand their choices,” he said. “We’ve been so focused on streamlining enrollment through technology that we’ve missed out on the education of employees. We must go back to providing employees with a good education so they can make informed decisions.”