By Cyril Tuohy
In an early indication of how one of the nation’s largest life insurers plans to accelerate sales growth in the voluntary benefits space, MetLife said that it will sell voluntary and worksite products on 10 private health care exchanges next year.
William J. Wheeler, president of the Americas for MetLife, said the company expects “meaningful sales” through the private exchanges. “Also, by offering our full suite of products ‘down-market’ we should be able to pick up market share in the midsize employer market,” he said.
Sales of voluntary and worksite benefits are expected to increase by 40 to 50 percent in 2014 compared to 2013, Wheeler also said during a conference call with analysts about MetLife’s financial outlook in 2014.
Group, voluntary and worksite benefits operating earnings for the past four quarters, which ended Sept. 30, came to $926 million, the company said. Group, voluntary and worksite benefits represent a single business unit for MetLife in the Americas.
Voluntary insurance benefit products – term life insurance, for instance – have their origins in group products. Worksite products – accident, cancer, critical illness, disability and permanent life insurance – are rooted in individual insurance products.
Voluntary and worksite benefits have been growing in the past several years, surveys show. This is because many of these benefits are completely paid for by the employee, but at group prices that tend to be lower than similar coverage in the individual market.
Most employees don’t distinguish whether a product is a voluntary or a worksite product, so long as they are covered. Because of uncertainty about medical coverage surrounding health reform, many employees find voluntary benefits attractive.
A recent survey of insurance executives said distribution of voluntary and worksite products will change in the next five years as more of these products are sold over the health benefits exchanges, according to Eastbridge Consulting Group.
Private exchanges sponsored by benefits giants like Aon Hewitt and Mercer got off to a fast start in the spring with millions of workers and managers at large companies signing up.
In the retail segment, MetLife also reported operating earnings of $1.31 billion for the past four quarters ending Sept. 30, but the company said it expects a 6 percent to 8 percent decrease in annuity sales next year.
Lower sales are expected as the company moves away from lifetime living benefit riders and variable annuities, in favor of index-linked and fixed annuities, Wheeler said.
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 [email protected].
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