2008 Voluntary Sales Showed Steady Rise

The products with the highest growth rates for 2008 were: term life, critical illness, and accidental death and dismemberment.

In terms of market share, disability (short-term plus long-term) and life insurance (term plus universal and whole life) held an almost identical share in overall voluntary product market share, with 22% each. Chart 3 shows the sales mix by line of business.

Group vs. Individual

The mix of products between the group and individual platforms moved somewhat in 2008, with group products increasing their share of sales to 48% or $2.5 billion. The growth rate for group products in 2008 was almost 9%, while individual sales were down slightly by 0.3%.

Chart 4 shows the detailed results since 2002.

Distribution Segment Sales

As seen over the past several years, the benefit broker distribution segment again accounted for the largest percentage of sales of any single segment (46% of total voluntary sales in 2008). Career agents came in next, with 31% of total sales.

Eastbridge has identified 5 distinct segments selling voluntary/worksite products: career agents and 4 brokerage segments: benefit brokers, classic worksite brokers, worksite specialists and occasional worksite producers.

Chart 5 shows the overall results.

Looking at the state of the market and economy today, we believe the growth rate in the short term is likely to continue in the 3% to 5% range. While the recession has had an impact on employee headcounts, we believe employers will be looking to add voluntary benefits to keep their benefit packages competitive without incurring additional cost.

Gil Lowerre is the company president and Bonnie Brazzell is vice president of Eastbridge Consulting Group Inc., Avon, Conn. Both can be reached at [email protected]