Since 2001, I have been involved with the Voluntary/Worksite Industry directly or indirectly. Most years, Aflac, Allstate, Colonial Life and Unum have led the industry in annual premium and market share.
I recently reviewed the last 15 years of data that I have compiled in addition to industry data and other data compiled from my years of consulting and my involvement directly with different carriers. This segment of my article will be focused around four leading carriers who have led the industry throughout this time span.
Between 2001 – 2016, the industry had a CAGR of 5.33%. During this time period, Aflac, Allstate, Colonial, and Unum dominated the industry in total premium each year. Below are the CAGR results over the last 15 years;
1) Unum – 9.95%
2) Allstate – 8.63%
3) Colonial – 4.69%
4) Aflac – 3.24%
Between 2001 – 2006 the CAGR for the Voluntary/Worksite industry was 6.14%. Below are the CAGR results for this time span;
1) Unum – 18.41%
2) Allstate – 18.26%
3) Aflac – 9.85%
4) Colonial – 5.33%
Within this same time span, the industry enjoyed year over year growth of $1,215 b. Aflac represented $551 m of the industry growth within this time period, and Aflac’s market share increased from 26.25% in 2001 to 31.20% in 2006.
Unum, Allstate, Aflac and Colonial’s combined percentage of annual premium grew from 39.9% in 2001 to 49.4% in 2006.
Colonial Life experienced a slight decrease in market share from 6.90% in 2001 to 6.70% in 2006.
Unum’s market share increased from 3.40% in 2001 to 5.90% in 2006.
Allstate increased its market share from 3.30% in 2001 to 5.70% in 2006.
What Has Happen Since 2006?
The industry increased $939 m from 2007 -2011. New carriers jumped into the industry, and major medical carriers started actively offering VB products too and wanted their share of the market.
Aflac peaked in 2007 with $1,558 b in annual premium although its market share fell slightly to 30.92%. By the end of 2011, Aflac’s market share had fallen to 26.09%, and its annual premium gain was only $6 m for the five-year period with a CAGR of 0.08%.
Unum continued to see yearly success reaching $460 m in 2010 and a 8.77% market share before falling to $387 m in 2011 with a market share of 6.84% and a CAGR of 6.92% for the five-year period.
Allstate continued to grow from 2007 – 2011 and benefitted by winning Walmart from Aflac. This accelerated Allstate’s growth in the large employer market. Their net growth in annual premium over the five-year period was $94 m with a CAGR of 6.24%.
Colonial saw its market share decrease in 2007, 2008 and 2009 before increasing market share to 6.84% in 2010. This increase was short-lived when its market share fell to 6.47% in 2011. For the five-year period ending in 2011, Colonial’s net premium growth was $51 m with a CAGR of 3.05%.
MetLife, who had been building their VB/Worksite products under the radar was no longer a secret. They grew their annual premium from an estimated $232 m in 2006 to about $300 m in 2011. Met’s market share grew to about 5.30% in 2011 with a CAGR of 5.28%.
Medical carriers Humana, Cigna, and Aetna, had CAGR of 46.51%, 24.18%, and 11.21% respectively.
Sun Life, Lincoln Financial, and Transamerica made their mark in the five-year period with a CAGR of 20.48%, 17.93%, and 15.84% respectively.
Part two of my article will cover what has happen since 2011.
