Health insurance companies are the latest entrants into the market for voluntary worksite benefits, Eastbridge Consulting Group finds.
A study by Eastbridge, Avon., Conn., also finds health insurers are becoming formidable competitors in the worksite market. Almost every one is offering or considering offering voluntary products, and although some offer only selected products like dental or vision care, others offer a broad lineup.
Health insurers are recognizing that these products are already important and are likely to become even more significant in the future, says Gil Lowerre, Eastbridge president.
The increased presence of health insurers in the market has been a result of the recent fast growth of benefits brokers among voluntary benefit producers, Lowerre believes.
Eastbridge surveyed more than 40 medical insurance carriers and found that over 30 already offer some voluntary products. Another 5 either have access to these products through a subsidiary or are in merger talks with companies that offer voluntary medical products.
"For most of these carriers, voluntary accounts for a very small percentage of overall sales, including medical sales–usually 5% or less," says Bonnie Brazzell, vice president of Eastbridge. "But as a percentage of ancillary product sales, voluntary sales can account for between 25% and 70% of sales."
Much of a company's sales success with voluntary worksite benefits depends on the length of time the carrier has been selling in the market, Eastbridge says. Among carriers that do not yet offer voluntary products, survey respondents cite lack of management support and complex administrative requirements as the main reasons. These same respondents all indicated, however, that their companies are likely to enter the voluntary market in the near future.
