Why the Ancillary Benefits Market Is Growing
Ancillary benefit sales are growing. Projected compound annual growth is more than nine percent through 2027-2028. Employer-sponsored benefits and Medicare gap coverage accounted for most of $9.34 billion in premiums in 2023. Eastbridge Consulting Group says sales continued to grow in 2024 – up two percent for sales across all voluntary lines. In-force premium in 2024 grew at a stronger rate of 4.5%.
What is driving this growth? Some say it’s the rising cost of medical care and health insurance. Others say it’s today’s diverse, multi-generational workforce. After all, 57% of employees say they want benefits not offered by their employers. Ancillary and supplemental benefits give employees the opportunity to fill the gaps. So, they can match coverage to their specific needs. And ancillary benefits typically cost less than major medical plans.
When it comes to these products, employees can choose traditional products like Dental, Vision, or Life Insurance. Or they can add Critical Illness, Accident, Indemnity, Disability, and sometimes others.
Ancillary and supplemental plans help your clients expand their options for employees. Sometimes without increasing their costs. That’s because many ancillary and supplemental products can be offered on a voluntary basis. That means the cost is paid fully by the employee. In most situations, there’s no contribution required by the employer, although an admin fee may apply.
How Ancillary Benefits Boost Broker Retention and Commissions
Offering voluntary and supplemental benefits can boost employee clients’ retention. And it will increase your income. Consider these stats:
- Aging Population: The Medicare-eligible population is growing – from 68 million in 2024 to 80.3 million by 2033. California has the highest number of Medicare beneficiaries in the country. That opens the door for increased dental, vision, hospital indemnity, and critical illness sales. Or Medicare supplement sales.
- More Commissions: Adding ancillary and supplemental product sales can increase your commissions. By 30% to 200% . . . or more. (Commissions vary by product.)
- Market Potential: Nearly 90% of California employers offer health insurance. The ancillary and supplemental product adoption rate is lower. Your prospects for dental, vision, life insurance, and supplemental health sales are significant.
- Increased Loyalty: Three-quarters of employees say they will stay at a job if they have voluntary benefits.
Offering voluntary ancillary and supplemental benefits is a benefit for your clients. It is also a likely ongoing revenue stream for you and your agency.
Your Word & Brown Partner for Ancillary Benefits
Having the right General Agency as your partner is important. Word & Brown has a decades-long reputation as a firm that can help you attract, quote, and close more business. We are experts in the ancillary business, too. In fact, we have a dedicated Ancillary Sales Support Team that provides support for your ancillary sales to group of 25-100.
When it comes to ancillary sales, we’re ready to assist with:
- Employer-sponsored and voluntary coverage
- Standalone sales or offerings alongside Medical
- Census conversion: time-saving and expeditious data transfer from census to carriers
- Unparalleled carrier options; visit our Carrier Portfolio for details
- Streamlined process – from quote to implementation – including underwritten quotes
- Solid carrier relationships
- Quote comparison with an Executive Summary
- Rate negotiations with carriers
- Multi-year rate guarantees
- Professionals dedicated to ancillary sales
W&B is a recognized insurance industry leader. We have 40+ years of experience and a history of providing Service of Unequalled Excellence. Contact your W&B representative today. Find out how partnering with us can help you maximize your sales opportunities. Ancillary and voluntary products can recession-proof your business. They can ensure ongoing sales and commissions. If you’re not already working with us, it’s easy to get started: register online call 800-869-6989.
