Recent years have seen a shift in employee benefits that have taken smaller employers and brokers by storm – the rise (and demand for) voluntary benefit offerings
We recently explored a survey from Willis Towers Watson where it was revealed that voluntary benefits aren’t viewed as voluntary anymore
Employers of all sizes are now trying to add voluntary benefits to their overall employee benefit plans in an effort to meet the demands of today’s workforce, and stay competitive when attracting and retaining talent
Another recent survey further explored the growth of voluntary benefits, focusing on how brokers are keeping up with this trend.
Brokers Are Selling More Voluntary Benefits
Conducted in February and March of 2018, the annual BenefitsPro/Eastbridge Voluntary Benefits survey
was completed by more than 400 brokers.
The main results from the survey show that brokers are turning to voluntary benefits to stay competitive, grow their business, and earn more revenue.
The first statistic revealed in the survey showed that 57% of brokers
are now either selling or cross-selling voluntary benefits, up from the 48% in 2015.
Additionally, only 20% of brokers say they only sell voluntary benefits occasionally, which is down from the 23% of respondents who said this in 2015.
Benefit brokers are also writing more voluntary benefit cases compared to last year:
- 1 or 2 new cases – 26% (27% in 2017)
- 3 to 5 – 34% (44% in 2017)
- 6 to 10 – 25% (18% in 2017)
- 11 to 15 – 7% (6% in 2017)
- 16 or more – 9% (4% in 2017)
In another eye-opening result, the percent of revenue coming from voluntary benefits are also much higher than in years past:
- Up to 5%: 35% (32% in 2017)
- 6% to 10%: 18% (32% in 2017)
- 11% to 25%: 28% (25% in 2017)
- 26% to 50%: 13% (6% in 2017)
- Greater than 50%: 7% (5% in 2017)
How Do Benefit Brokers and Voluntary Brokers Differ?
The next part of the survey explored some of the differences between traditional benefit brokers and voluntary brokers when it comes to voluntary benefits.
The first findings showed the most popular voluntary benefits sold by both set of brokers. Believe it or not, there wasn’t much of a difference.
First, let’s look at benefit broker responses:
- Accident (tie)
- Critical Illness (tie)
- Short-term disability
- Term life
And here are the responses for voluntary brokers:
- Short-term disability
- Critical Illness
- Term Life
Next, the survey explored non-traditional benefits and the percentage of each broker group that is selling them:
- ID Theft Insurance: 57% of benefit brokers and 49% of voluntary brokers
- Wellness Programs: 49% of benefit brokers and 23% of voluntary brokers
- Legal Plans: 47% of benefit brokers and 41% of voluntary benefits
- Discount Health Programs: 43% of benefit brokers and 47% of voluntary brokers
- Pet Insurance: 26% of benefit brokers and 20% of voluntary brokers
Level of Competition and Biggest Threats to Voluntary Benefits Business
With voluntary benefits growing in popularity, you would expect that competition for these services to be higher than in previous years. The survey does show that both types of brokers are feeling the competitive pressure with voluntary benefits:
- No competition: 4% benefit brokers and 0% voluntary brokers
- Not much competition: 22% benefit brokers and 19% voluntary brokers
- Average levels of competition: 49% benefit brokers and 43% voluntary brokers
- Somewhat high levels of competition: 20% benefit brokers and 24% voluntary brokers
- High levels of competition: 6% benefits brokers and 15% voluntary brokers
The survey also asked brokers to identify the biggest threats to their voluntary benefits business. Some of the responses are surprising, while some are what you would expect give the competition in the market. Here are the threats, and the percentage of each broker type that listed them as their biggest challenge:
- Competition from other brokers: 18% for both benefit and voluntary brokers
- Competition from electronic brokers: 10% benefit brokers and 13% voluntary brokers
- Takeovers: 14% benefit brokers and 7% voluntary brokers
- My lack of experience on voluntary: 4% benefit brokers and 7% voluntary brokers
- Employee lack of interest: 14% benefit brokers and 16% voluntary brokers
- Employer lack of interest: 32% benefit brokers and 25% voluntary brokers
The survey also acknowledges that competition, especially amongst brokers, is going to continue to grow each year as voluntary benefits grow in number and demand.
Voluntary Benefits Are Now a Necessity for Everyone
The Benefits Pro/Eastbridge report and the Willis Towers Watson report both show how important voluntary benefits are today for employers, employees, and brokers alike.
With new voluntary benefit trends emerging
each year, this is something that will most likely become even more popular in the years ahead.
That’s why it is more important than ever for brokers to have voluntary benefit offerings
that meet (or preferably exceed) client expectations!
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