A February 26 Employee Benefit News story by Elizabeth Gallentine reported on a presentation at EBA’s Workplace Benefits Renaissance in February by Eastbridge Consulting Group’s Bonnie Brazzell and Gil Lowerre.
According to Eastbridge, the voluntary benefit field is one of the few industries able to sustain persistent growth over a significant period of time, and these days it’s group employee benefit brokers who are reaping those benefits more than any other distribution method. As a result, they have assumed a position of power in the industry, but if they want to maintain growth, benefit brokers must remember to put employee interests first.
In the last five years, sales on a group platform have grown dramatically compared to individual sales, Brazzell said, noting “we have become a group industry.” And employee benefit advisers are driving that growth, she added. Eight years ago, benefit brokers were responsible for 25% of sales, Brazzell said, today that number is 57%. “They are the growth engine for the marketplace,” she added.
This is magnified when sales are broken down by distribution segment, said Lowerre, Of the five main channels — benefit brokers, classics, specialists, occasional and carrier agents — all are relatively flat, except for brokers. It’s not because more brokers are selling the benefits, that percentage plateaued around 95% about five years ago, Lowerre said. Sales are still skyrocketing for brokers, he said, because of “a sudden burst on the productivity side.” Brokers are “using voluntary as an aggressive weapon, not just as a defensive weapon,” he said.
There are a number of voluntary products with high sales potential, based on the percent of employees surveyed by Eastbridge who are interested in them compared to the percent of employers not currently offering them. The products at the top of the list include employee purchasing programs, auto/home insurance, cancer, annuity, legal, critical illness and pet insurance.