AVON, CONNECTICUT, USA (July 31, 2008) – The latest results of Eastbridge Consulting Group�s Voluntary Industry Confidence Index survey show that the majority of those in the industry continue to be positive about voluntary sales despite an overall decline in the Confidence Index.
Based on the survey results, the Index at mid-year 2008 decreased to 96.2 from 97.3 at year-end 2007. The index is calculated using three key expectation measures about the voluntary industry:
- Sales growth
- Employee enthusiasm about voluntary products
The lower confidence index number is largely driven by the results of the sales growth question.
“We see an interesting dichotomy among our respondents,� says Bonnie Brazzell, vice president of Eastbridge. �On the one hand, the percentage of responders who think that sales will �increase a lot� went up to 24 percent (from 20 percent at year-end 2007) and a total of 82 percent believe sales will increase at least a little. At the other extreme, we see 12 percent saying sales will decrease. We�ve never seen more than five percent saying they expect a decrease.� Six (6) percent said that sales will �stay the same� (the same percent as at year end).
“We expected to see some deterioration in the index due to the economy,� says Gil Lowerre, president of Eastbridge. �In addition, we think we are also seeing the results of the plateauing of the number of new brokers (employee benefit brokers) entering the marketplace. As we reach the point where all benefits brokers are in the voluntary market, the game changes,� adds Lowerre. �It means that all brokers have a voluntary relationship. And that for a carrier to gain brokers the company must take them away from someone else rather than just convincing a broker to try voluntary for the first time.”
Response to the question about carrier profitability was down slightly in the most recent study primarily in the percent expecting the profitability to be �much more� profitable. The results of the employee enthusiasm question were actually up over year-end results with 67 percent believing employees will be more enthusiastic about voluntary benefits (up from 63 percent).
The Voluntary Industry Confidence Index study is conducted semi-annually and includes responses from individuals active in the market � carriers, brokers, and vendors. Like other confidence indices, the index is a single number that compares the current results to a baseline measure. The first Confidence Index survey was completed in December of 2005; the results from that survey serve as our �base� year (meaning the index was at 100 for that year).
The Voluntary Industry Confidence Index report is available only to Eastbridge Insight and Information Partner companies as well as to participants. The survey will be conducted again in July of 2008. For more information on becoming a participant, contact the company at [email protected].
Eastbridge Consulting Group, Inc. is a marketing advisory firm serving insurance and financial services organizations in the United States and Canada. www.eastbridge.com