It's no surprise that voluntary coverages are spreading throughout the landscape. Our latest MarketVision, Employer Viewpoint Update report (January, 2010) showed that 66 percent of employers now offer at least one voluntary product. The opportunity is the 34 percent that don't, plus the fact that many of the 66 percent only offer one or two coverages on a voluntary basis.
The potential is huge. But who has the inside track on selling these employers? If you're like most people, you've answered, "Their current broker." And almost all of these employers offer some form of medical insurance, probably meaning that the great majority currently has a broker relationship. Is that the broker who most often sells the voluntary plans?
We know that employees see voluntary coverages as a part of their employer's overall benefit package, suggesting that they are closely related to the other benefits. But employers do not. They see voluntary as a different type of coverage, not necessarily related to the other benefits. In that same study, we asked employers about their preferences regarding broker contact. Specifically, we wanted to know whom they want to contact them about offering a new voluntary coverage. The chart below shows the top four responses.
More than half of all employers were open to being contacted about voluntary benefits by brokers who didn't have a prior benefit relationship with them. Or stated another way, voluntary offers brokers an effective way to start from scratch and build relationships with potential customers they wouldn't otherwise get to meet. And this openness to considering voluntary with the help of a new contact has been increasing each time we've measured it (since 2002).
Many of us work in an environment where acquiring a new account is becoming a rarity. Most of our time is focused on retaining accounts, cross-selling existing customers, etc. This is the hidden potential of voluntary sales. In a world where virgin accounts have almost ceased to exist, and where competing for account control is a constant struggle, voluntary offers a chance to break out, offering new solutions while actually increasing market share.
This won't last forever. Eventually, saturation will arrive in the voluntary space, along with the characteristics we have gotten so used to in the other benefit lines. Many of us don't remember the last time a benefit market looked like this and we will be making a major mistake if we don't take advantage of the uniqueness of the current environment. Make sure your eyes are open and get into the race.
Gil Lowerre can be reached at (860) 676-9633 or glowerre@eastbridge.com. Bonnie Brazzell can be reached at (803) 738-1236 or bbrazzell@eastbridge.com.
