AVON, CONNECTICUT, USA (December 21, 2004)�In a recent study by Eastbridge Consulting Group, Inc., The Future of Worksite Marketing: An Executive Perspective (2004), worksite marketing executives said they are optimistic about the future of the worksite/voluntary market. Executives said they expect the market will continue to grow at about 10 percent per year for the next few years. Despite this opportunity, many are concerned about writing profitable worksite business.
The annual study looks at the world of worksite marketing in five years from the perspective of those on the front line�worksite executives. “Like last year, worksite executives say the biggest obstacle facing their company is the ability to write business on a profitable basis,” says Gil Lowerre, president of Eastbridge. Sixty percent of the executives interviewed for the study chose this as one of their most formidable obstacles. “Today’s executives are most concerned with the level of competition in the market and what it is doing to profitability,” says Lowerre. “For years,” continues Lowerre, “the industry counted sales as the primary (or even only) measure of success. But today, that is changing. Executives are concerned that carriers are cutting their margins and compromising their pricing daily in search of growing sales.”
“Executives in our study said that there is too much irrational pricing in the market,” notes Bonnie Brazzell, vice president of Eastbridge. “In addition, these executives claim that employers and brokers are pushing them to eliminate or reduce traditional risk management tools such as guaranteed issue limits, enrollment period limits, and medical underwriting on voluntary in order to simplify the plan designs and communications,” adds Brazzell. All this is seen as a real threat to profitability.
Other obstacles topping their list of concerns were providing excellent administration and attracting quality brokers. “Last year, product competition was a ‘top three’ concern for worksite executives,” says Lowerre, “but attracting quality brokers replaced that in this year’s study. We are hearing companies of all sizes say that the competition for brokers is intensifying, which is also adds to the profitability dilemma,” adds Lowerre. Indeed, most in the industry acknowledge that the pool of experienced worksite/ voluntary brokers is not growing and that new distribution is needed. But executives recognize that growing new distribution is expensive and difficult.
In addition to their thoughts on the obstacles facing the worksite/voluntary market, The Future of Worksite Marketing: An Executive Perspective (2004), explores worksite executives’ thoughts on:
- What is likely to change the most over the next five years?
- What product innovations are likely to be on the horizon?
- How will technology impact the industry?
- Will the regulatory climate change and, if so, how?
- Who will be the competitors in the future?
- What will distinguish the winners from the losers in the future?
This year’s study includes 21 participants. Their companies account for almost 60 percent of the 2003 worksite/voluntary sales (excluding AFLAC).
The report is available for purchase for just $750. For more information on this report click here or call 860-676-9633.
Eastbridge Consulting Group, Inc., is a marketing advisory firm serving insurance and financial services organizations in the United States and Canada.