By Cyril Tuohy
The verdict on 2013 voluntary benefits sales is in. According to two studies, sales of voluntary benefits in the workplace are up about 10 percent over 2012, though a change in reporting methods in one of the studies may temper the robust growth trend.
Last year, voluntary and worksites sales were estimated at $6.64 billion, up from $6.03 billion in 2012, according to the Eastbridge Consulting Group. That represents an increase of 10.1 percent over the 12-month period, according to the U.S. Worksite/Voluntary Sales Report issued annually by Eastbridge.
New annualized premium of voluntary benefits bought at the worksite reached $4.3 billion in 2013, a 9 percent increase over 2012, according to a separate estimate issued earlier this year by LIMRA in its 2013 U.S. Worksite Sales Survey.
Voluntary benefits are paid for 100 percent by the employee through a payroll deduction. They are offered in addition to shared benefits for which the employer and the employee contribute toward the premium.
Not all employers offer voluntary benefits. Employers that elect to make voluntary benefits available to workers find them attractive because employers don’t contribute to premiums. Offering the benefits helps to retain employees.
Employees like the benefits because they allow workers to supplement coverage they already have, and they can buy the coverage through group rates that are lower than in the individual market.
In an era of health reform and important change, as employers continue to shift the burden of paying for benefits onto employees, interest in voluntary benefits has increased.
Bonnie Brazzell, vice president of Eastbridge, said that with several new insurance carriers participating in the U.S. Worksite/Voluntary Sales Report for the first time, and with other carriers using a new method to calculate premiums, sales increases of voluntary benefits in 2013 were closer to 4.3 percent.
“As a group, the top 15 companies had an average sales increase of 8 percent; just two of the top 15 experience a decrease in 2013,” Eastbridge president Gil Lowerre said in a statement.
In-force voluntary benefits premium in 2013, estimated at between $27 billion and $35 billion, increased by 4 percent over 2012, Eastbridge said.
Eastbridge’s survey is based on data collected from group and individual voluntary benefits from more than 60 carriers. The LIMRA data comes from 43 U.S. companies, including 20 of the largest 25 insurance carriers.
The two sources help to determine an exact picture of the state of the voluntary benefits market which is difficult to track.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at firstname.lastname@example.org.
© Entire contents copyright 2014 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.