Despite the growing similarities between employee benefit brokerand voluntary broker segments, and some convergence between the twogroups, notable differences remain. As for parallels, both segmentssell the same go-to products, infrequently use private exchanges,and see a relatively low threat from “eBrokers.” They also bothexpect the new administration in Washington to have a positiveimpact on their business.

But even with such growing areas of agreement, voluntaryproduction levels remain very different. According to a recentEastbridge Consulting Group survey of the employee benefit brokermarket, only 11 percent of these brokers produce more than $500,000of voluntary new business annualized premium (NBAP), while nearly50 percent of voluntary brokers produce that much or more. The samestudy found several areas that may explain why voluntary brokerscontinue to produce at a higher level than their employee benefitbroker counterparts.

One reason is the presence of established sales goals. Nearly 80percent of voluntary producers cite having voluntary productiongoals, with most indicating that all staff members have voluntarysales goals. This compares to only 47 percent of employee benefitbroker agencies. Lack of formalized goals for voluntary sales wouldsuggest that a “bigger fish to fry” mentality remains insidemany agencies, which likely means voluntary production are anafterthought for these organizations.

There also continues to be differing levels of annual new casevolume between these broker segments. Voluntary brokers report morethan three times the new voluntary case volume per year than theiremployee benefit broker counterparts. Having more new cases affordsvoluntary brokers more opportunities for employee sales and is alikely reason for the difference in overall voluntaryproduction.

Additionally, there is a contrast between segments in the numberof carriers used per employer. There is a correlation between aproducer's experience with voluntary and the number of differentcarriers they are willing to bring into a single account at thesame time. Voluntary brokers continue to use multiple carriers pergroup, which requires a comfort level with voluntary enrollment andadministrative processes in order to create a successful case. Thiscomfort allows them to offer better products and those productsthat best respond to the specific employer/employee needs of eachcase. Better-aligned products, along with greater comfort withenrolling, often result in greater participation and overallsales.

That said, it might be time to question whether our businessgoals and new case sales are sufficient to make voluntary a focusin our organizations—or whether it remains a fringe component ofour business. Either way, goals alone likely won't be enough.Broker organizations will need to be adept at the mechanics ofvoluntary programs, to ensure carrier selection remains focused onclient value, rather than simply being easier for the broker tosell and install.