Eastbridge Worksite Studies: Product Trends in Worksite Plans, and Persistency and Profitability of Worksite Business

New Eastbridge study highlights
product trends in worksite plans

Which worksite products are the most profitable? What are the most interesting nontraditional or emerging products? Are group products playing a bigger role in worksite marketing? What do we, as individuals and an industry, need to do differently in light of these trends?

Although the answers to these questions may not be so “cut and dry,” the findings in Eastbridge’s latest Spotlight Report, Worksite Product Trends, will definitely spark discussions among carriers and their producers. (And since the study was just conducted in March and April of 2002, your discussions-and decisions-will be based on current trends.)

Following are just some of the changes and trends presented in the report:

  • Respondents believe that today’s employers and employees are more interested in products that help cover deductibles and out-of-pocket expenses than they were in the past. In fact, more than 25 percent are already marketing a hospital/medical supplement policy. What’s more, the top five worksite “growth” products for the future are all health-care related products.
  • As for nontraditional or emerging products, most carriers are interested in investment/savings-type products or products that help offset healthcare expenses. Specifically, most of those surveyed are interested in adding long-term care, vision, and investment/savings products in the next few years.
  • Group products are playing a bigger role in worksite marketing. The majority of respondents said that their companies are offering more group products today than in the past. They believe that both group and individual products will blend concepts and that products will become more similar.
  • Respondents also believe that group products are needed to be competitive in the market. In fact, 65 percent said that carriers must sell group products if they want to be competitive in today’s worksite market.

To find out more about the future of worksite marketing products and how your products fare against these trends, simply order a copy of Worksite Product Trends.

Worksite Product Trends is available for purchase for just $750. For more information, email info@eastbridge.com or call (860) 676-9633.

Can you really make a profit in worksite marketing?

The worksite marketplace has attracted much attention over the last ten years. Perhaps that’s because U.S. sales have continued to increase at a double-digit pace. But many players have entered the marketplace and found it to be more complex than they thought. And some have wondered how (or if) anyone makes a profit in the market.

According to a recent Eastbridge study, Worksite’s Bottom Line: Persistency and Profitability of Worksite Business, worksite marketing can and should be profitable�and not just for the “big” worksite players. If you are a good steward of the business, that is, you should expect it to be profitable. Good stewardship means managing the line as a standalone business. This includes having a properly defined strategy, business plan, and expectations for your worksite business-and then making sure these fit in with your corporate goals.

Today, any carrier serious about worksite marketing needs to accurately measure the business’ results and profitability. To do this, they need to have benchmarks against which to measure their performance. This is especially important in the early years of a program when capital requirements are greatest. To date, however, there have been few benchmark numbers for worksite persistency and profitability.

The purpose of publishing the Worksite’s Bottom Line report was to give carriers information on how other worksite carriers measure profitability. A second goal was to examine industry practices in the areas of profitability and persistency. Specifically, the study looks at the most common measures of profitability and the key levers for monitoring and managing it. Where possible, it also provides comparative data.

According to the carriers we surveyed:

  • Return on Equity (ROE) and profit margin are the most commonly used measures of profitability.
  • Many cannot accurately measure the individual components of their worksite business (especially expense allocation) because their worksite line is not a standalone business.
  • Most have profit “targets” for all product lines (the most common was a 15 percent ROE target with around 10 or 11 percent as the minimum acceptable level).
  • Most do not vary their targeted profitability margins (on products or business) by the type of underwriting used.
  • Almost all measure persistency; however, few have any rewards for good persistency or penalties for poor persistency.
  • Universal or whole life, accident, and cancer insurance are the most profitable products in their worksite portfolio.

To learn more about the profitability and persistency practices of leading worksite carriers and, perhaps more importantly, the philosophies behind them, consider ordering your copy of Eastbridge’s Worksite’s Bottom Line: Persistency and Profitability of Worksite Business report today.

The report is now available for purchase for $3,500. Interested parties can e-mail Eastbridge at info@eastbridge.com or phone the company at (860) 676-9633.