The voluntary employee benefit market this year will grow in the neighborhood of 8% to 10% over 2006, according to preliminary estimates from Eastbridge Consulting Group.

Those estimates concur with a recent study by LIMRA International of 31 worksite carriers, which experienced new sales growth averaging 9%.

Bonnie Brazzell, vice president of Eastbridge, a worksite benefit consulting firm in Avon Conn., says disability insurance was the top-selling voluntary benefit last year, and she expects it will continue to be so for the foreseeable future.

“Hospital indemnity, critical illness and other types of products that help people cover out-of-pocket medical expenses are also likely to do well, but we won’t know for sure until we collect the data,” Brazzell adds.

For 2008, she expects sales growth for voluntary products to be in “the low double digits.”

Brazzell expects one significant change in the industry next year: Carriers are likely to update their benefits administration systems to perform more smoothly and efficiently, she says.

“Carriers are going back to basics and deciding to improve their practices,” she says. “They’ll be giving employees more help in the enrollment period, improving their process with prepopulated forms, etc. Also, with the proliferation of workplace products, we are seeing more carriers go to the next step, which is to help employees understand what products they specifically need to purchase.”

Carriers also will invest more in billing and servicing to make it easier for employers and benefit administrators to deal with voluntary benefits, Brazzell predicts.

A recent survey by LIMRA of employee enrollment processes found similar results.

While the traditional paper process still leads for enrolling employees in worksite benefits, laptop enrollment is now the second most popular method and is likely to continue to grow, according to LIMRA. Other increasingly popular paperless options include call centers and the Internet.

LIMRA found that, as of Sept. 30, year- to-date sales of voluntary life insurance sales were up only 1% over the same period of 2006, while sales of voluntary health care products were up 13%.

Despite the flat life sales, the third quarter was the fifth straight quarter of growth for the worksite marketing industry, says Ron Neyer, a LIMRA analyst.

Long-term disability insurance was a big seller this year after declining in 2006. In addition, more employers are showing an interest in mini-med plans, Neyer observes.

As for 2008, there may be opportunity for increased sales of life insurance, “just because it has been slumping,” he says.

Lance Osborne, vice president, field force development and marketing services for AFLAC Inc., Atlanta, says his company saw strong increases in new accounts this year. Business owners continue to be receptive to voluntary products as they seek to attract and hold on to employees, he says.

AFLAC’s emphasis on training, which it started in 2005, paid off in higher sales in 2007, he says. This year, the company also increased its focus on training sales managers. The ad campaign featuring the popular AFLAC Duck also contributed to sales growth, Osborne says.

In addition, the company sponsored a number of events, including an agreement with a NASCAR racing team, Roush Fenway Racing, to put the insurer’s logo on its cars. AFLAC also become the official supplemental insurance company for NASCAR.

In another move that has spurred sales, Osborne notes the company redesigned its flagship cancer policy in 2007 to fit new medical advances.

“Previously, policy benefits were aligned to pay a daily benefit for radiation and chemotherapy,” he says. “Today, you may take a pill for a month and get other treatments every 3 weeks,” he notes, “so we changed the product to closely mirror treatment advances.”

Osborne notes competition in the industry is intensifying as more employers seek to add voluntary benefits. Despite that, AFLAC expects another strong year in 2008 as it continues to build sales through recruitment and training, diversifying products and intense marketing, he says.

AFLAC’s U.S. premium income increased almost 11% to $993 million in the third quarter compared to year-earlier figures. For the first 9 months of 2007, its total new annualized premium sales rose more than 11% to $1.1 billion.

As usual, its sales were led by its accident-disability product line and cancer expense insurance. In addition, it reported sales increases for its hospital indemnity policies of 21% during the third quarter compared to a year earlier.

Tom Gilligan, senior vice president, marketing and branding, Colonial Life & Accident Insurance Company, Columbia, S.C., agrees that competition is intensifying in worksite benefits.

Although Colonial Life’s voluntary benefit sales have lagged the industry this year, he says that could change as sales figures for the closing weeks of the year come in.

“We think we’re well positioned for next year,” he says. “We expect double-digit growth.” The company’s market share, which is second to AFLAC, will continue to hold steady, he predicts.

Colonial Life, a subsidiary of Unum, Chattanooga, Tenn., introduced new supplemental health products this year, including Medical Bridge 3000, released in August, which Gilligan describes as “extremely successful.”

The company also announced a limited benefit medical plan in October, aimed at small employers that can’t afford to pay for group health benefits.

“Next year will be about health products,” Gilligan says of the voluntary market. “They are really going to burn in next year.”

Other efforts Colonial plans for the coming year include the introduction of a new brand identify, due next month, and an upgrade to benefits communications and enrollment services it offers to clients, Gilligan says.