Voluntary benefits continue to be widespread in the employee benefit marketplace, but have not reached critical mass at most brokerages, according to Employee Benefit Adviser’s 2009 survey of benefit brokers.
The annual poll, conducted in late November, found that although 74% of brokers derive at least some revenue from voluntary benefits, relatively few have made them their main focus. Only 10% of respondents said they derive 80% to 100% of their revenue from voluntary benefits, while 37% said that voluntary benefits make up less than 10% of their revenue.
Health benefits continue to drive sales, the survey found. In all, 83% of respondents derive some revenue from health benefits; 38% derive 80% to 90%, and 14% derive all of their revenue from health benefits.
Only 41% receive some revenue from selling retirement products, and nearly half of them (21%) earn less than 10% from the products.
Brokers were split evenly about prioritizing their efforts to garner new business in 2010, with five major worksite products grouped closely at around 30% each. Life insurance was cited as the expected focus of new-business efforts in 2010 by 32% of the respondents, followed closely by disability insurance at 31%, major medical at 29%, HSAs at 26% and dental at 25%. Only 13% expect to expand their non-insurance voluntary business.
Use of technology by brokers remains on the low side, the survey found. In-house online enrollment is utilized by 29% of the brokers who responded, and customer relations management software is used by 19%. Other uses of technology include employee surveys, employee benefits portals, e-mail blasts, Web seminars and office administration. Twenty-five percent said they depend on a TPA for technology implementation, and 13% don’t use technology at all.
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1 Comment(s)
Posted by: Ray DiDia | December 10, 2009 4:06 PM
In light of the current (and unfortunately future)economic crisis in the U.S., I believe the answer for improved retention, increased(or new) revenue generation and most importantly increased profits potential for the agent/broker community lies in the adoption and use of technology moreso then the continuing effort to obtain new clients (which on average cost 13x more then introducing/selling new products and services to existing clients) or distribute more insurance products.
In fact, when you examine the growth across numerous market segments (retail, housing, automotive, manufacturing, insurance and financial services)in 2010 and beyond, the trends are all down considerably. Furthermore, with looming deficits at both the federal and state levels, the chances for increased tax burdens on employers and employees is significant. With less disposable income, all non-essential purchases will be down considerably.
Yet, there is one bright spot on the horizon. The market for Human Resources Outsourcing is expected to grow by $300 billion in 2010 and beyond. There are two main reasons for the explosive growth. First, current HR Outsourcing technologies are reaching the end of their usefull life. And second, with the Administrations introduction of new laws, rules and regulations as well as the stepped up enforcement of existing laws, rules and regulations, the need for affordable, easy and flexible HR Outsourcing tools (particularly in the <100 EE market), tools is growing.
Agents and brokers need to look toward the future and the time to change is now. We currently provide HR Outsourcing technology to over 4,500 agents
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