hen we look back on 2020, we’ll remember it as a year full of disruption and change as brokers (and the rest of the world) adapted to the COVID-19 pandemic.
2021 Voluntary Survey
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Our annual voluntary benefits survey indicates renewed enthusiasm and interest among employers and employees.
1. Brokers have seen mixed impacts on their voluntary business over the past 12 months in terms of quote activity, sales, and enrollment activity/requests.
Close to half (42%) of brokers indicated that quote activity has decreased over the last 12 months; however, nearly a third (30%) indicated it has increased. Brokers are split on the impact they have seen on voluntary sales, with a third seeing decreased sales, just under a third seeing no change, and just over a third noting increased sales. Enrollment activity decreased for just under a third (30%) of brokers, while it also increased for just over a third (36%).
Many brokers have seen no effect on their in-force business over the last 12 months, with 52% reporting that employee-level lapse rates have stayed the same, and 59% reporting that employer-level lapse rates have stayed the same. Just 25% have seen increases in employee lapses and 20% have experienced an increase in account lapses.
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This year’s BenefitsPRO/Eastbridge voluntary benefits survey of producers explores how COVID-19 has impacted brokers’ voluntary business and what future trends they expect. The survey collected data in February and March.
We explore seven key takeaways from the broker survey, three looking back on the effects COVID-19 had on 2020 and four looking to the future.
By Erin Marino
Benefit brokers were more likely (49%) to have experienced sales results “as expected” in 2020, while voluntary brokers were more likely (45%) to have experienced lower than expected sales. Meanwhile, voluntary brokers were more likely (29%) to have experienced slightly higher than expected sales results compared to 20% of benefit brokers.
Of the brokers who experienced higher than expected voluntary sales, a less than 25% increase was most common, and the brokers who experienced lower than expected voluntary sales saw decreases of either less than 25% or between 25-49% in equal measure.
2. Most brokers experienced 2020 sales that were as expected or lower than expected.
A majority of brokers (74% of voluntary brokers and 67% of benefit brokers) said their most frequently used enrollment method changed due to COVID-19.
Benefit brokers most commonly used online, self-service enrollments for the 2020 enrollment season, while voluntary brokers most frequently used the call center. For benefit brokers, virtual voluntary one-on-one meetings and virtual group meetings followed by one-on-one meetings were the next most common enrollment methods. For voluntary brokers, online, self-service enrollments and virtual voluntary group meetings were the next most common.
Voluntary brokers were more likely (53%) to have fewer employees enrolled due to the change in enrollment method, while just 33% of benefit brokers saw decreases and 36% said the change in enrollment method had no impact on the number of enrolled employees.
3. Brokers’ most frequently used enrollment methods have changed and participation results are mixed.
Brokers expect higher voluntary sales in 2021 compared to 2020. Voluntary brokers are more optimistic, with 86% expecting increased sales, as opposed to 69% of benefit brokers. Less than 10% of all brokers expect sales to be lower in 2021.
4. Brokers expect voluntary sales to recover in 2021.
Most brokers (~80%) think face-to-face enrollments will return, but will be used less than before COVID-19.
5. Brokers expect face-to-face enrollments to return, but not be used as often.
Roughly equal proportions of brokers plan not to make any changes, to offer more supplemental health products, to offer more life and disability products, or to offer more non-traditional products. Several brokers plan to make a combination of changes and other responses, including adding mental health, wellness, pet care and ID theft.
6. Brokers are mixed in their planned voluntary product changes due to COVID-19.
Brokers expect employers and employees to be more enthusiastic about voluntary benefits as a result of COVID-19. Voluntary brokers are more optimistic than benefit brokers, with 88% expecting employer enthusiasm to be much more or a little more next year, compared to 68% of benefit brokers. Interestingly, 71% of benefit brokers feel employee enthusiasm will be much more or a little more next year, while 91% of voluntary brokers share this expectation.
Overall, 2020 was a mixed bag for brokers in terms of quote activity, voluntary sales, and enrollment activity. Brokers had to use different enrollment methods than they were accustomed to using. On the positive side, most saw little change to their in-force business in terms of employer and employee lapses.
Looking forward, most brokers feel optimistic and expect sales to recover in 2021. They anticipate both employer and employee interest/enthusiasm in voluntary benefits will increase, so they may need a change in strategy to meet this growing demand. Most brokers feel that face-to-face enrollments will not be used to the same extent as pre-COVID-19.
Given the mixed impacts on participation that brokers found in 2020 with the change in enrollment methods, how are you going to ensure effective virtual/phone-based education tools are being offered? Producers are planning a mix of product changes. How are you evaluating benefits differently with COVID-19 in mind? To be successful, brokers in 2021 will need to think differently about voluntary enrollment, benefits education, and product offerings to best meet increased employer and employee demand.
7. Brokers are optimistic about the future receptivity of employers and employees toward voluntary benefits as a result of COVID-19.
Design by Chris Nicholls
