CHATTANOOGA, Tenn.--(BUSINESS WIRE)--
Unum (NYSE: UNM) expands its analysis of the employee benefit
landscape with the recent release of trends impacting nine industry
sectors. A complement to its Buyers Study released in September, this
supplement is a playbook of buying patterns and benefits decisions
specific to these industries.
For example the education market is expecting 17 percent growth
between 2004 and 2014(1), which will require balancing the need to
fill positions with the need to balance a budget. So what's the
answer? Look into employee-paid or shared-funding benefit plans that
offer a broader benefit package at an affordable price.
Providing a deeper level of detail for each industry, the
supplement supports the message of the Buyers Study - that employers
are looking for new options to offset healthcare costs, and
supplemental insurance continues to fill that void at a rapid pace.
"Benefits are important to employees - so much so that they are
willing to negotiate for them or leave a job because of the lack of
them," said Mike Simonds, senior vice president of marketing and
product development. "This supplement allows employers in these
specific industries a source that they can reference. Now they can
say, 'This is where the industry is going, and here's how we can
differentiate ourselves from the pack.' As we look forward to a
looming labor shortage, these kinds of conversations will take place
more and more for companies that want to succeed."
The supplement, available exclusively online at
www.unumprovident.com/buyerstudysupplement, is designed to assist
brokers, HR directors and business decision-makers in making informed
choices about their employee benefits packages.
"In the Buyers Study, we set the stage for the issues that all
companies will face in the coming years and current sales trends,"
said Simonds. "With the supplement, we're giving employers our
insights regarding where each industry is headed and recommendations
to consider that are specific to each industry's changing needs."
Industry Snapshots: What's Inside
Education
-- Most short term and long term disability insurance plans are
employer-paid (68 percent total inforce).
-- For educational institutions with 250 employees or more, short
term disability (STD) benefit durations tend to be longer. For
those with 2,000 or more employees, nearly half choose
durations of greater than 25 weeks.
-- The most popular supplemental offerings sold in 2005 were
individual STD, life and critical illness insurance.
Engineering, Architecture and Related Services
-- Fifty-one percent of STD plans issued from 2003-2005 were
employer-funded, while 33 percent were 100 percent
employee-paid.
-- The market is split almost evenly between employers who choose
group coverage with residual definitions of disability (47
percent) and total definition of disability (46 percent).
-- The two most common choices for maximum benefit amounts for
group life insurance are the $50,000 to $99,999 range (33
percent) and the $10,000 to $24,999 range (29 percent).
Financial Services
-- During 2005 a declining proportion of financial services cases
offered an employer-paid long term disability (LTD) plan, and
in the past three years, there has been a trend toward
100-percent employee-funded group STD.
-- Fifty-five percent of cases sold in the past three years
selected LTD benefit maximums in the $5,000 to $7,499 range.
In addition, 89 percent of recent cases in the past three
years selected the 60 percent benefit package.
-- This sector is expected to grow by 30 percent between 2004 and
2014.
Health Services and Research
-- Over the past three years, the number of plans requiring
100-percent employee funding has grown from 28 percent to 35
percent of inforce STD plans.
-- Benefit maximums for 72 percent of STD plans are in excess of
$500 per week, with 36 percent offering a benefit greater than
$1,000 per week.
-- During 2003-2005, more than 80 percent of LTD plans sold
featured a 60 percent of salary benefit.
Information Services
-- Historically, 66 percent of customers chose employer-paid
funding for their LTD plans. But, in the past three years,
policies show a shift toward employee-funded plans, with
employer-paid dropping to 57 percent.
-- Fewer employees choose spouse or child life insurance on their
group policies than in many other industry sectors, likely a
reflection of this young workforce.
-- The trend of choosing a residual definition for LTD has
increased from 66 percent of inforce cases to 79 percent since
2003.
Legal Services
-- When comparing sales from 2003-2005, there is a shift toward
more 100 percent employee-paid LTD plans. Legal, along with
education and retail trade, is one of the top three industries
to follow this trend.
-- STD benefits for this sector are becoming richer. Current
trends show 80 percent of plans offer a maximum weekly benefit
of $500 or more, and many offer a maximum benefit of $1,000 or
greater.
-- Law firms are among the most highly targeted and penetrated
industry sectors for executive coverage. This sector tends to
offer a richer critical illness benefit than average,
purchasing twice as many plans in the $20,000 to $40,000
benefit range than the average for all industries.
Management Consulting and Marketing
-- There has been a strong shift towards employee contributions
for LTD coverage. Forty percent of policies sold in this
industry are now 100 percent employee-paid. Employer-paid
plans now represent only 49 percent of all policies.
-- STD benefits are becoming richer with the majority of policies
offering $501-$1,000 per week and greater than $1,000 weekly
maximums gaining in popularity.
-- Supplemental life insurance is the supplemental benefit most
often purchased for this segment at 47 percent of total sales,
followed by critical illness, with 18 percent of sales.
Manufacturing
-- More than half of these LTD customers chose employer-paid
plans last year - a decrease compared to the two-thirds of
inforce business that offer employer-paid plans.
-- While LTD shows some cost shifting to employees, there is no
clear trend away from employer-paid STD plans. In the past
three years 60 percent chose employer paid and 23 percent
chose 100 percent employee-paid.
-- Manufacturing is moving toward longer waiting periods for LTD
policies, with waiting periods of 180 days on the increase,
while 90 day waiting periods are on the decline.
Wholesale/Retail Trade
-- Retail trade is the only industry studied in which 100 percent
employee-paid is the No. 1 funding choice for recently issued
LTD policies.
-- For wholesale trade, nearly 70 percent of inforce LTD cases
select employer funding, although that percentage lessened in
2005 to just under 54 percent.
About UnumUnum (www.unum.com), formerly UnumProvident, is the largest
provider of group and individual income protection insurance, and one
of the leading providers of employee benefits products and services in
the United States and the United Kingdom. Through its subsidiaries,
Unum insures more than 21 million people and provided $6 billion in
total benefits to customers in 2006.
(1) Bureau of Labor and Statistics, U.S. Department of Labor,
Career Guide to Industries, 2006-07 Edition, Educational Services,
online at www.bls.gov/oco/cg/cgs034.htm
All data is from Unum's internal database unless otherwise noted.
Source: Unum
Contact: Unum
Mary Clarke Guenther, 423-294-6300
Toll free: 866-750-8686
Manager, Media Relations
mguenther@unumprovident.com
or
Jessica Stone, 423-294-6300
Toll free: 866-750-8686
jlstone@unumprovident.com