Keeps growing and growing and ... While not registering the double-digit growth rates of previous years, work-site sales are steadily increasing.Work-site carriers recorded another year of growth in 2004, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. U.S. Work-Site Sales, a recent study by East-bridge Consulting Group Inc. According to the study, new U.S. work-site sales totaled an estimated $4.22 billion, a 3% increase over 2003 results. Growth improved from the 1.8% increase realized in 2003 (based on revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. several companies made to their reported 2003 sales). Over the past eight years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time work-site market has shown steady growth--doubling the sales in the past seven years. "Work-site" sales as defined in the study are employee-paid products, either individual or group, sold at the work site, with premium paid through a payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. . East-bridge's study examined overall work-site sales and sales by product line and distributor segment. This year's study included data from 1997 through 2004 and tracked the performance of 65 work-site carriers (both group and individual). Some highlights of the study are as follows: * U.S. work-site sales totaled an estimated $4.22 billion. * The employee-benefit broker segment accounted for the largest percentage of sales of any single segment. * Life insurance accounted for the largest share of sales. * Hospital indemnity Recompense for loss, damage, or injuries; restitution or reimbursement. An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. and supplemental medical plans had the highest growth rate. Inforce Premium Inforce premium increased about 11% in 2004, which is in line with historical averages (but slightly lower than the 13% growth in 2003 and the 17% growth in 2002). Sales by Product Line On a product basis, life insurance accounted for the largest share of sales with 24%, but disability was a close second at 23%. Year over year, both disability and life sales showed slower growth than other product lines. In fact, new life premium was actually somewhat lower than in 2003, while disability sales increased just 3%. Only a few product lines--disability, hospital indemnity/supplemental medical, and "all others" (such as annuities, accidental accidental /ac·ci·den·tal/ (ak?si-den´t'l) 1. occurring by chance, unexpectedly, or unintentionally. 2. nonessential; not innate or intrinsic. death, etc.)--showed increases from 2003 to 2004. The slight decrease in life sales may be attributed to the increasing percentage of work-site sales being made in established cases with life insurance already in place. The hospital indemnity and supplemental medical plans had the highest growth rate again this year--increasing by more than 80%--indicating that employers and employees continue to be interested in products that help cover deductibles and out-of-pocket expenses out-of-pocket expenses n. moneys paid directly for necessary items by a contractor, trustee, executor, administrator or any person responsible to cover expenses not detailed by agreement. . Perhaps that's why more carriers than ever are offering and promoting this product to producers and their clients. Sales by Product Platform Group platform products continued to outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, individual plans. Group products grew 4% in 2004, while individual grew just 1%. Individual platform sales, however, still exceeded group platform sales; in 2004, group products accounted for 43% of new sales while individual plans accounted for 57%. Sales by Distribution Channels The study also tracked the distribution channels for work-site products. Past research has identified six distinct segments selling voluntary/work-site products: career agents and five brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. segments--employee benefit brokers, classic work-site brokers, work-site specialists, occasional work-site producers and multiline A cable, channel or bus that contains two or more transmission paths (wires or optical fibers). brokers. Eastbridge Eastbridge is a village in Suffolk, England. It is located approximately five miles east northeast of Saxmundham. The village is two miles from the North Sea. Located in Eastbridge is the Eels Foot Inn, an ale-house dating as far back as 1533. found that the employee benefit broker segment, again this year, accounted for the largest percentage of sales of any single segment. They produced 37% of the new premium, a 2% increase over 2003. The classic work-site broker, work-site specialist and multiline broker shares decreased from 2003 to 2004, while the occasional broker segment gained some ground (from 4% to 8%). Career agents, the second-largest segment in terms of work-site sales generated, also increased, to 29% from 26% in 2003. Trends and a Look to the Future While still impressive compared with many segments of the insurance industry, 2004 was the second year in a row that the voluntary segment did not realize double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth. As a result, the question is raised if this slower sales pattern is a sign that there's a fundamental change taking place in the work-site market. Eastbridge believes, based on its analysis of the 2004 results and its views of the changes occurring in the industry, that the work-site market will continue to grow--and evolve--in the years to come. Upon further analysis of the data, the results indicated that just a few companies had an "off" year in 2004. In fact, almost 70% of the companies surveyed registered sales increases. What's more, more than 50% had double-digit sales growth while only six companies had decreases of $ 5 million or more in new business premiums. These companies often were facing internal issues that caused them to be "off momentum" in 2004. Eastbridge calculated that had these six companies sold the same amount of new business as they did in 2003, the industry growth rate would have been 6.9%. Other changes in the benefits world reveal that sales will continue to grow, although probably at slightly lower levels than the double-digit sales of the past. Voluntary sales are a viable (and often used) tool for dealing with the well-documented increases in the costs of health and welfare benefit programs. While health plans have seen increasing co-pays and deductibles, premium sharing is becoming common, and traditional benefits are morphing Transforming one image into another; for example, a car into a tiger. The term comes from metamorphosis. Morphing programs work by marking prominent points, such as tips and corners, of the before and after images. into base/buy-up plans. These pressures will continue to squeeze Squeeze 1. In financial terms, a period of time when borrowing is difficult. 2. In general business terms, times when increasing costs cannot be passed onto consumers. The decrease in profits is said to be caused by a "squeeze" on profit margins. employers and fuel the interest in consumer directed health care, benefit banks, and defined contribution concepts. As a result, the migration from employer-paid coverages to employee-paid plans has begun and is certain to continue. Today, all major group carriers are preparing for the voluntary migration. These trends ensure that growth will continue in the voluntary/work-site market. Eastbridge also believes that voluntary sales will be positively impacted by a growing tendency among Americans to purchase financial-security products at the workplace. As traditional distributors and agents abandon abandon v. to intentionally and permanently give up, surrender, leave, desert, or relinquish all interest or ownership in property, a home or other premises, a right of way, and even a spouse, family, or children. the middle market for (usually) affluent market niches, more and more Americans will find that the workplace is their primary source of benefits. Add the fact that consumers are comfortable buying at the workplace and that they appreciate paying through payroll deduction, with its implicit budgeting mechanism. As a result of these trends, voluntary sales will continue to grow at a faster rate than most insurance industry segments. While the requirements for success will grow more stringent and competition will become more daunting daunt tr.v. daunt·ed, daunt·ing, daunts To abate the courage of; discourage. See Synonyms at dismay. [Middle English daunten, from Old French danter, from Latin , those that can weather the storm will be well rewarded. In total, Eastbridge forecasts an average compound growth rate of 8% between now and 2020, raising industry new premium sales in 2020 to almost $15 billion. Key Points * U.S. work-site sales of voluntary insurance products in 2004 increased 3% over 2003. * Group products again saw a higher growth rate than individual products. * New work-site premium sales are expected to reach almost $15 billion in 2020.
Group and Individual
Work-Site Sales
Although individual products
Account for more new work-site
Sales, group product sales are
Steadily increasing.
2001 2002 2003 2004
Individual 65% 59% 58% 57%
Group 35% 42% 42% 43%
Note: Table made from bar graph.
Work-Site Sales by
Distributor Segment
Employee benefit brokers
continue to account for the
largest percentage of sales.
Multi-Line 3%
Occasional 8%
Specialist 8%
Classic 14%
Career Agent 29%
Employee 37%
Benefit Broker
Note: Table made from pie chart.
Mix of sales
By Product Line
Although life and disability are
the top sellers, year-over-year
they have shown slower growth
than other product lines.
Life 24%
Disability 23%
Accident 15%
Cancer/ 12%
Critical
Illness
Hospital Indemnity 12%
And Supplemental
Medical Plans
Dental 10%
Other 3%
Note: Table made from pie chart.
In-Force Premium
In-force premium grew about 11% in 2004.
Low Estimate of High Estimate of
Inforce Premium Inforce Premium
Year (in $ Billions) (in $ Billions)
1997 $5.20 $6.20
1998 $5.80 $7.00
1999 $6.70 $8.00
2000 $7.30 $8.80
2001 $8.50 $10.30
2002 $10.00 $13.30
2003 $11.30 $15.00
2004 $12.50 $16.60
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