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Life Health > Health Insurance

On the rise: Voluntary sales among the largest employers

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Advisors take note: If you actively sell voluntary employee benefits, you might do well to focus chiefly, if not exclusively, on the largest U.S. companies. For voluntary products, sales are increasingly navigating to this segment of the employer market.

For evidence of this, look no further than a new report from Eastbridge Consulting Group, which shows that companies with more than 2,500 employees accounted last year for 40 percent of sales of voluntary products. That’s up from 36 percent in 2013.

In comparison, sales to companies with 100-499 employees, the second largest market segment, topped out at 19 percent, a two percent rise from 2013. The next largest segment, businesses fielding 26 to 99 employees, held steady in market share (12 percent) between 2013 and 2014. (See charts below.)

Voluntary products — life, disability income, health and long-term care insurance, among other worksite-sold solutions — are optional benefits offered by employers where the employee pays the premium. Based on age and the amount of insurance purchased, the premiums may be less expensive than individual insurance products because of an employee group discount.

Eastbridge’s 5th annual “U.S. State ESI and EPI Data for 2014 report” includes state-by-state sales and in-force data and provides two measures that relate the data to the number of employed Americans in each state. The ESI (Eastbridge Sales Index) and EPI (Eastbridge Premium Index) provide real sales coverage (ESI) and penetration (EPI) measures on a state level.

The report additionally provides information on sales by employer size and in-force premium by line of business. 

  Mix for 2014 Mix for 2013 U.S. Employees   Employer Size Segment ESI
<10 employees 4% 4% 11%   <10 employees 21
10-25 employees 6% 7% 11%   10-25 employees 30
26-99 employees 12% 12% 13%   26-99 employees 59
100-499 employees 19% 17% 14%   100-499 employees 79
500-999 employees 10% 11% 5%   500-999 employees 105
1,000-2,500 employees 11% 13% 7%   1,000-2,500 employees 87
>2,500 employees 40% 36% 39%   >2,500 employees 60

Source: Eastbridge Consulting Group.

Commenting on the report, Eastbridge CEO Gil Lowerre says that the market penetration of companies with the most employees (2,500-plus), though significant, is a long way from being tapped out.

“The highest percentage of sales is a bit misleading if you are looking at whether the segment is saturated or underpenetrated,” says Lowerre. “If you look at the ESI” — sales divided by the employee population — “for each employer size, you can better tell which segments are indeed well penetrated or underpenetrated.”

“The least penetrated segments continue to be the two smallest ones — under 10 lives and 10 to 25 lives,” adds Eastridge Vice President Bonnie Brazzell. “This is largely due to the fact that many carriers and/or brokers do not focus on small cases.”

The segment with the highest penetration and ESI remain at the high end of the middle market: companies with 500 to 999 employees. The 2,500-plus employee segment, though boasting the highest sales, has a comparatively low ESI, indicating room for additional sales.


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