According to Eastbridge Consulting Group’s sixth annual U.S. Worksite Study, Employee Benefit Brokers claimed the largest percentage of worksite sales in 2004 of any single producer segment.
This is the second year in a row for this segment to increase as a percentage of total sales.
2004 2003 2000
EE Benefit 36% 34% 29%
Classic 13% 19% 17%
Specialist 8% 10% 14%
Occasional 8% 4% 10%
Multi-Line 3% 7% 5%
Career Agents 28% 25% 24%
These five broker segments are defined as follows:
* Employee Benefit Brokers — These producers typically focus on
traditional group employee benefits. Worksite products are generally
offered as an additional line.
* Classic Worksite Brokers — These producers focus on worksite sales. Their operations may be small or medium sized, and they may or may not offer support service (Section 125 administration, billing, etc.) to their clients.
* Worksite Specialists — This segment consists of large marketing
organizations whose primary focus is worksite sales. These companies typically sell larger cases and often work with many sub-brokers. The organization also offers a wide variety of support services (Section 125 administration, billing, customer service, and claims payment).
* Occasional Worksite Producers — These producers are insurance
generalists. They have a small agency that sells insurance products
other than worksite-group, individual, or property/casualty. Worksite
products are a small part of their operation.
* Multi-Line Agency — The producers in this segment work in a worksite department of a large agency. The agency does not focus on worksite marketing; however, the department and its producers do.
“Employee benefit brokers accounted for half of the brokerage sales in the market in 2004,” said Bonnie Brazzell, vice president, Eastbridge. “This is a milestone and reinforces what we have been reporting for some time – that the Employee Benefit Broker segment is experiencing the fastest growth of all voluntary producer segments,” adds Brazzell.
“We are also seeing more sales from those brokers for whom worksite is a secondary line than from those who concentrate on worksite,” commented Gil Lowerre, president of Eastbridge. “In 2004, those who focus on worksite wrote 44 percent of the sales while non-worksite producers wrote 56 percent.”
One surprising finding was the increase in share from career agents (this percentage has been declining over the past few years). “Although this increase is small, we decided to explore it a little further,” noted Brazzell. “After analyzing the data, we believe that the increase is due to more companies reporting their distribution segment data this year as compared to past years.”
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