In 2007, voluntary benefit sales in the worksite industry recorded another year of healthy growth.
A recent study by our company, Eastbridge Consulting Group Inc., estimates new worksite sales in the U.S. for 2007 totaled over $5 billion, an increase of almost 7% over 2006.
(We use the terms worksite and voluntary interchangeably and define them as employee-paid life and health products, either individual or group, sold at the worksite, and paid for by payroll deduction.)
Looking below the surface, Eastbridge’s U.S. Worksite Sales Report finds that this is not your father’s voluntary market any more. The business has evolved from one characterized by a few individual products sold by producers who specialize in voluntary to one with many different players, producers and product types.
Today’s voluntary market includes both individual and group products. Over the last few years, we’ve seen group products growing at a faster pace than individual plans. Indeed, when we look at the top 15 or so carriers in the marketplace, traditional group carriers are well-represented.
In 2007, 9 of the top 15 voluntary carriers by new sales premium were group carriers. And among the other top carriers, all but one offer several group products. Last year, the mix of new sales was 46% group and 54% individual. But this mix of sales is heavily influenced by the industry’s number 1 carrier, Aflac. Currently, Aflac has over a 30% market share and sells individual products. When you remove Aflac’s sales from the industry, the mix changes dramatically: 61% of voluntary sales are on the group platform.
By line of business, we are also seeing changes. In 2007, disability (short- plus long-term) came in ahead of life insurance (term plus universal and whole life) in overall product market share (23% vs. 19%). This is the second year in a row that disability sales premium exceeded life sales premium.