The voluntary business is an important economic bellwether. Itsounds plausible given that these are discretionary financialproduct purchases by large numbers of consumers.

As consumer sentiment changes, there is a direct impact on oureconomy. There also is, so we're told, a direct impact onparticipation rates, overall voluntary sales, etc. Given the factmost Americans have access to voluntary products, it may be true.But do voluntary brokers and company executives have the ability touse that information to predict the future? We wanted to test thatconcept.

Since 2005, Eastbridge has been asking voluntary brokers andvoluntary company executives to share their attitudes andpredictions. Twice each year, we survey a sample of theseprofessionals about their recent sales and on their predictions(for the coming 12 months) in three categories: future salesgrowth, consumer attitudes toward voluntary and on overallprofitability of their voluntary business. The resulting data arethen combined into a measure that we label the Voluntary ConfidenceIndex.

The index climbed through the first three surveys until itpeaked in late 2006, when it began an unexpected and precipitousdrop through December 2008. It is noteworthy that participantsbecame more negative one year before the recession officiallybegan, and turned positive seven months before the recessionofficially ended. Also, the decline in the index bottomed out atthe end of 2008, twelve months before the only year with a drop insales that the industry has ever recorded.

Were these voluntary experts able to predict the recession? Didthey predict the first downturn in voluntary sales ever recorded?Or was it simply a coincidence? We may soon find out because (onceagain) the index turned negative in July 2011. In that same survey,more participants reported 2011 sales had thus far exceeded theirexpectations, making the negative predictions difficult tounderstand. Almost 40 percent of participants said year-to-datesales were higher than expectations; 39 percent said they were inline with expectations; and only 22 percent said they were belowexpectations. Yet despite this rosy report, all three components ofthe index turned negative, with overall profitability dropping themost.

If you believe voluntary practitioners have greater insight,look out for a downturn of some sort by year-end. If you think it'sa coincidence, then congratulations on a strong showing so far thisyear. Either way, we'll see.