The lines between voluntary brokers and employee benefitbrokers continue to blur when it comes to selling voluntarybenefits, according to respondents to this year'sBenefitsPRO/Eastbridge voluntary benefits survey. Over 400producers responded to the survey in February and March 2017,representing a combination of employee benefits brokers,traditional voluntary brokers, enrollment companies and agents.

Employee benefit brokers today account for 60 percent oftotal voluntary sales. As such, they are gainingexperience with voluntary and, as a result, looking more likevoluntary brokers on many fronts. In the most recent survey, alarge majority (about 90 percent) of the benefit brokers indicatedthey currently sell voluntary products, with more of these sellingactively than in the past. Fewer of the brokers mentioned they onlysell voluntary “occasionally” or as a cross-sell to select existingaccounts. The following graph shows the contrast from just a fewyears ago.

Voluntary products also account for alarger percentage of the benefit brokers’ current revenue stream.Fewer benefit brokers in the current survey say voluntary makes up10 percent or less of their revenues, while most say it nowaccounts for between 11 percent and 25 percent of theirrevenues.

While voluntary accounts for a higher percentage of revenue forbenefit brokers, the voluntary brokers continue to sell morevoluntary. Even so, benefit brokers are selling more voluntary thanbefore, as can be seen by the increase in the percentage selling $1million or more in voluntary premium.

Among the benefit brokers surveyed, most indicated selling verysimilar products to their voluntary broker counterparts. In fact,four of the top five most frequently sold voluntary products todayare the same for both benefit brokers and voluntary brokers. Thisis quite different from 10 years ago, when the products sold bythese two brokers were their primary point of differentiaton.

Both types of brokers are also adding non-traditional productsto their voluntary portfolio. ID theft coverage is the most popularwith voluntary brokers, while wellness programs rank highest withbenefit brokers.

With increased sales and productivity per broker, as well asboth types of brokers selling similar products, competition has,not surprisingly, increased. This year has seen a marked increasein the percentage of benefit brokers indicating that competitionfor voluntary sales is high or somewhat high.

From the perspective of which carriers are used most frequentlyfor voluntary products, benefit brokers and voluntary brokers againhad similar responses. Four of the five top carriers were the samefor both groups of brokers.

Both benefit brokers and voluntary brokers say they now selectbest-of-breed products for their cases even if that meansrecommending more than one carrier. Although this has often beenthe approach used by voluntary brokers, benefit brokerstraditionally used just one carrier for simplicity's sake, or totake advantage of bundled discounts. That appears to no longer bethe case today, however.

Despite this, there is a difference between voluntary andbenefit brokers in the number of carriers used per account. Benefitbrokers are still more likely than voluntary brokers to use justone carrier.

Neither benefit brokers nor voluntary brokers recommend privateexchanges to a significant percentage of their clients, with themajority suggesting these to 5 percent or less of their clients.The overall percentages in the current survey are very similar tolast year's responses.

When asked what the future holds for private exchanges,respondents this year were somewhat less positive than last yearthat the use of exchanges will grow.

While not as optimistic about the future of private exchanges,many were positive about the possible effect President Trump andhis administration will have on their business. Voluntary brokerstended to be more optimistic about a positive impact, though themajority of benefit brokers were also at least somewhatpositive.

When asked to name the biggest threat to their personalvoluntary business over the next 12 months, a significantpercentage of voluntary brokers named “competition from otherbrokers” while the benefit brokers’ responses were somewhat mixed.Slightly more benefit brokers named “employer lack of interest” astheir top threat, followed closely by “takeovers,” “competition”and “employee lack of interest.”

The benefit brokers’ concern regarding lack of interest byemployers (and even employees) is somewhat surprising, as surveyswith these audiences continue to show their interest in offeringand purchasing voluntary benefits to round out theirportfolios.

When asked what they need to be more successful, the benefitbroker and voluntary broker responses were also somewhat different.The benefit brokers feel they need more assurance regarding thecarriers administrative and billing capabilities, as well as moreknowledge about carriers. Voluntary brokers are also interested incarrier assurances in administration and billing, but feel theyneed more enrollment capacity.

The future continues to look promising for voluntary sales andfor brokers who sell these products. As competition increases,however, brokers will need to up their game and find ways todifferentiate themselves from others in the market.