Years ago, voluntary represented a (relatively) new approach to benefits, and it had seemingly unlimited potential in terms of new account prospects. People wondered what would happen if that potential was realized and most employers eventually offered voluntary products. Would sales slow? Would pricing pressures accelerate? Would the market come to resemble the traditional employer-paid market?
That day has come. By the end of 2012, 77 percent of all employers offered at least one voluntary product. Yet industry sales growth continues at a robust clip.
There are a variety of reasons for the continued strong growth. Participation in existing accounts has strong upward potential. Employees are adding additional voluntary coverages. But another factor is emerging that suggests growth has a long way to go.
The average number of voluntary products offered by employers has been increasing steadily. The sidebar on the right shows that among employers who offer at least one voluntary product, the average number offered is in the three-to-five range, in all case sizes.
We have been watching these numbers increase for several years now and have observed an interesting phenomenon. The biggest obstacle to selling a voluntary product to an employer is getting that first product in place. Subsequent products become easier to sell and the number offered tends to accelerate. It's as if some employers feared that offering voluntary has drawbacks, or involves too many administrative issues. But once they take the leap and have experience with voluntary, they appear to jump on the bandwagon and accelerate their adoption of additional voluntary benefits.
The key is helping them get over that first hurdle. With that accomplished, it appears the broker will have a receptive audience for built-in additional sales to their existing accounts.
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