There's no doubt about it: There's strong demand among both employers and employees for voluntary/worksite products. Buying intentions are strong, and the untapped market potential is vast. PPACA, the movement of employer-paid products to voluntary, and the introduction of new product forms have all been discussed. But what about brokers? Will they continue to increase their sales to meet that market potential?
Over the years, an increasing percentage of employee benefit brokers have begun selling these products, although the majority sold relatively few cases. Fifteen years ago, Eastbridge surveys revealed that about 40 percent of them offered voluntary products. Over the last four years, that percentage as reported by Eastbridge and Benefit Selling Magazine has consistently ranged between 90 and 95 percent, and hasn't changed over the last 18 months. In other words, growth in voluntary/worksite sales is no longer coming from new brokers entering the market. All of the EBBs the industry can attract are already on board the train.
The chart shows the change in sales (new business annualized premium) for each high-level segment since 2000.
We know that much of the EBB sales growth in the early years was due to new entrants. We also know that since 2010, the number of new EBBs entering the business has slowed or even stopped.
The conclusion is obvious. EBB productivity has switched into high gear. Since the early discussions of the Patient Protection and Affordable Care Act, broker comments and our surveys have documented the belief that brokers would soon be getting very serious about voluntary as a way to offset other revenue declines, and the evidence is now pouring in. EBB sales have increased 38 percent in the last four years, with relatively little growth in broker count. Today, EBBs are moving voluntary into an important place in their portfolios, moving beyond simple buy-ups into the mainstream of voluntary sales.
In terms of per capita production, EBBs trail classics, specialists and career agents by significant margins, but that is beginning to change. As their sales approach the industry average numbers, the industry can expect continued strong growth.
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