The ancillary insurance marketplace continues to attract interest among employers and employees. It should also be of interest to you as a broker, because ancillary sales give you a relatively easy way to increase your service to clients – and drive more income for yourself.
Ancillary insurance products are available from some of the industry’s leading insurers and through voluntary-focused carriers, somewhat lesser-known insurers, and third-party administrators. Coverage can include any of the following, which may be offered on an employer-sponsored or voluntary basis – or both, in some situations.
- Dental
- Vision
- Life
- Accident
- Disability (LTD, STD)
- Chiropractic & Acupuncture
- Hospital Indemnity, Gap, and Supplemental Medical
- Critical Illness
- Specified Condition (e.g., Cancer)
- Pet Insurance
According to the Eastbridge Consulting U.S. Voluntary/Worksite Sales Report, new business annualized premium through voluntary sales was up 4.5% in 2019 (the latest year for which complete sales data is available). Total sales for that year were $8.832 billion. That’s a lot of sales, which represents the growing opportunity for brokers selling ancillary – especially in the small business marketplace.
Two dominant carriers control nearly one-third of the voluntary sales marketplace: Aflac (with 18% of market share) and MetLife (with 13% of market share). Three other big players (Unum, Colonial Life, and Guardian) have more than 15% of the market combined.
Trends for 2021
A forecast for the year published in Benefits Pro suggests continued growth for voluntary. That’s based, in part at least, on greater interest among employees in response to the coronavirus (COVID-19) pandemic. Prior to 2020, there was already increased interest in off-cycle enrollments (apart from a company’s annual open enrollment period for medical benefits).
Off-cycle enrollments are expected to continue to increase and earn a closer look from employers and employees. That’s because when voluntary and ancillary benefits enrollments coincide with medical, employees sometime feel overwhelmed, and it is easier for them to overlook secondary products. The events of 2020 may prompt employees to look beyond traditional coverage in 2021, while seeking a way to personalize their benefits.
The American Pet Products Association (APPA) notes that 67% of American homes have pets, and there were multiple reports of increased pet adoptions in 2020 in response to home confinement during COVID. Sales of pet accident and illness insurance have balloon from $853 million in 2014 to a forecast of $4.4 billion in 2020. Consumer interest is high, which presents opportunities for you.
You may be able to accelerate further growth in voluntary insurance sales by working with your clients to share effective benefits communications. It’s important to educate consumers on the value and affordability of voluntary/worksite products, which can be tailored to each employee’s life stage and needs.
Focus on Small Group
According to the Small Business Administration, small businesses (those with 500 or fewer employees) make up 99.8% of all California businesses. In Nevada, they account for 99.1% of all businesses. Nearly half (48.8%) of California’s workforce is employed by small business, while it’s 41.3% in Nevada. Your potential ancillary and voluntary sales in this market segment are substantial.
Your Partner for Ancillary
Word & Brown has agreements with a diverse range of ancillary, voluntary, and worksite product providers. Our ancillary carrier partners exceed 25 for Dental, 15 for Life and Disability, and 20 for Vision, as well as 10 others for additional products and services.
You can also offer Dental, Vision, Chiropractic & Acupuncture, and Life Insurance in one program through the ChoiceBuilder exchange – with employer-sponsored or voluntary options and the ability to offer both. For groups effective March 1, 2021, ChoiceBuilder writes coverage for groups of up to 500 employees.
Word & Brown works with seven well-known partners for voluntary benefits:
- Aflac
- Colonial Life
- Guardian
- HealthiestYou by Teladoc
- Humana
- Principal
- Unum
You can click here to view our list of ancillary carriers and administrators for California and Nevada. Additionally, you can learn more abut our voluntary portfolio by visiting our Worksite benefits page.
Don’t risk losing out on ancillary and voluntary sales to another broker. Talk with your clients about available options to give employees more ways to address their individual and family needs, without increasing costs for the employer.
