In simple terms, a zero-sum game is one in which the victories of one competitor are exactly matched by the losses of another. The total market changes very little, while the competitors trade business and shares of the market.

Is the benefits marketplace a zero-sum game? There is evidence that it is. Look at the compound annual growth rate (CAGR) for several ancillary benefit products. The 10-year CAGR for life insurance sales based on premiums sold was 1 percent. For short- and long-term disability income products, it was zero. For dental insurance, the sales CAGR based on numbers of subscribers was actually negative, at minus 3 percent. The only products showing positive CAGRs were the relatively new lines of critical illness (+17 percent) and accident (+11 percent).

We see this reflected in certain market trends. There's a great deal of takeover business in the benefits market. For years, this has been true in the employer paid market and now, even in the voluntary market, takeovers are over 50 percent of sales. In a zero-sum game, product differentiation begins to wane, commoditization increases and there's competitive pressure on both pricing and underwriting to make concessions.

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