Insurance carriers and brokers expect to see a growth in the number of new groups that they acquire in 2006 as compared to the number for 2005. An overwhelming 91 percent expect the number to increase in 2006, with 43 percent saying the number will “increase a lot.”
This is one of the many findings in the latest Eastbridge Consulting Group Frontline report, The Worksite/Voluntary Industry Confidence Index. The study, which includes responses from 63 different organizations involved in this market (carriers, third-party administrators, and brokers), indicated that 95 percent of respondents expect sales of voluntary products to increase over the next 12 months, with 37 percent expecting sales to “increase a lot” in the very near future. Almost one in four respondents expects a significant increase.
The carriers were also optimistic about employee responses to voluntary. Almost 70 percent believe that employees will be more enthusiastic about voluntary benefits 12 months from now. What’s more, half believe that these employees will keep their policies longer and that persistency and retention will improve slightly in the near future.
Carriers paint a slightly different picture for the profitability of industry lines as a whole. Nearly 50 percent expect the line to be “a little more profitable.” Forty percent expect profitability to stay the same. The percentages significantly increase, however, when commenting on their own company’s profitability (77 percent expect their company’s voluntary line to be “much more” or “a little more” profitable). The study also found that about half of the respondents expect the premium rates for voluntary lines to increase at least a little over the next year.
Eastbridge’s Insight and Information Partner companies receive the report free of charge. For more information, contact Eastbridge at email@example.com.
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