copyright © 2012 by the hartford. confidential. all rights reserved. no part of this document may...

Copyright © 2012 by The Hartford. Confidential. All rights reserved. No part of this document may be reproduced, published or posted without the permission of The Hartford.

Growing Your Business With Affordable Disability and Life Insurance Benefits Tailored toSmall Employers


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Big Opportunities in Small BusinessBig Opportunities in Small Business

Patricia (Pat) Cronin, LLIFAssistant Vice President – U.S. Client Services

LIMRA

November 14, 2012


Overview

•Characteristics of Small Businesses

• Employee Benefits

• Special Groups

• The Future

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Characteristics of Small Businesses

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Source: U.S. Census Bureau, 2008 data.

Small Businesses Are a Big Market

Size (# of EEs) Percent

2 to 461%

5 to 9

17%

10 to 19

11%

20 to 99

9%

100 or more

2%

Total Employers

5.9 Million

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Stages of Growth

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New:24%

Declining: 15%

Expanding: 19%

Stable:42%

Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012


Business Demographics

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Employee Demographics

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Compared to those at larger firms, small business employees are:

Less educated

Less likely to be primary wage earner

More likely to work part-time

More evenly split by gender

Somewhat lower household income

Source: What is $1 Billion an Hour Worth? Employee Perspectives on Benefits, LIMRA, 2010.


Employee Benefits Landscape

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10

Small Business Benefit Penetration Driven by the Economy

Mid-Late ‘90s

Boom2008Great

Recession

Per

cen

t o

f F

irm

s

Source: Small Business Surveys: LIMRA 1994, 2001, 2005, 2012


Insurance Benefits Offered

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Base = All small employers (2-99 employees)



ME

Firms Offering at Least One Insurance Benefit by Region

62%

40%

53%

39%


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Firms Offering at Least One Insurance Benefit by Size

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Benefits Trends Over Time

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Base = All small employers (2-99 employees) *Disability Benefits were not reported separately in 1994.



Firms Offering Group Life or Health Benefits by Industry

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Importance* of Benefits to Small Business Employees

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* Percent rating the importance of the benefit 4 or 5 on a 5-point scale.Source: What is $1 Billion an Hour Worth? Employee Perspectives on Benefits, LIMRA, 2010.


Special Groups

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Family-Owned Businesses

18Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012

78% of Small Businesses are Family Owned

• Smaller (but not younger)

• Lower revenue

• Stable (but not expanding)

•Less Likely to have group, retirement, or executive benefits


Home-Based Businesses

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33% of Small Businesses are Home BasedSource: Small World Trends in the U.S. Small Business Market, LIMRA 2012

• Younger

• Very small

• Still establishing themselves

• Lower revenue

• Less likely to have group, retirement, or executive benefits


Female-Owned Businesses

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24% of Small Businesses are Female Owned

• Smaller

• Lower revenue

• Less likely to have group or retirement benefits

• Less likely to be expanding


Minority-Owned Businesses

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14% of Small Businesses are Minority OwnedSource: Small World Trends in the U.S. Small Business Market, LIMRA 2012

• Younger

• Still establishing themselves or expanding

• Lower revenue

• More likely to add group or retirement benefits in next 2 years


What Does the Future Hold?

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Plans to Add Insurance Benefits

Top Benefits Under Consideration:

Medical

Life

Vision

Dental

LTD

STD



Plans to Add Benefits by Stage of Growth

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Age of Firm



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Plans to Drop Benefits



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What about Health Reform?

Source: Kaiser Family Foundation, Explaining Health Care Reform: How will the Affordable Care Act affect small businesses and their employees?, 2012.


Employees Prefer to Obtain Insurance at Work

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Small business employees indicate it is important that benefits are available at work*:

– Long Term Disability 55%

– Short Term Disability 55%

– Life Insurance 48%

* Top two on a 5-point scale

Source: What is $1 Billion an Hour Worth? Employee Perspectives on Benefits, LIMRA, 2010.


Results from The Hartford’s 2012 Small Business Success Study align with LIMRA’s findings

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It’s common for owners to think of their employees as family, so much so that they often

try to shield employees from the worries and headaches of running a business, and

many consider the ability to pay their employees enough to live comfortably another key

measure of success.

Many business owners who offer employee benefits have sacrificed investments in

expansion and even their own compensation to avoid cuts to those benefits. Only 24

percent of the businesses surveyed have shifted healthcare costs to employees and

even fewer, 17 percent, have reduced the benefits they offer.

Small Business owners value their employees:“My employees are an extension of my vision, so they are really central to everything we do.” — Kelly Robertson, owner of Family Shoe Store, Brooklyn, NY.

See the full study and results at:

http://www.thehartford.com/successstudy/


The Hartford has expanded our offering for brokers to better serve Small Businesses

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Launch of Small Business Center with a

dedicated team of pre-sales specialists to provide

enhanced RFP service and response

• Extended hours of operation to 8am-8pm EST

• Single phone number and email

• Same day call back and <48-hour turnaround

on completed RFP’s

• Consistent positive initial broker feedback

New Small Business website and e-marketing

tools to enable more effective sales efforts

• Online RFP submission tool

• Product guides and e-collateral

• Small Business webinar recordings

10% more competitive pricing for all Small

Businesses

Small Business premium now eligible for

The Hartford’s Partner Rewards Program

Launch of centralized Sales Team to provide

proactive relationship management for Small

Business brokers

MyTomorrow coverage analyzer tool and

Small Business Success Study survey

results now available online

Summer 2012 Fall 2012


And we’re continuing to invest in our product and service offering to ensure your continued success

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Technology Industry Solution to complement our Physician and Attorney offerings

• Tailored plan designs and value added Loss Control and Return-to-Work services

• True 24x7 integrated coverage with Workers Compensation and P&C offering

• “Businesses like me buy” recommendation tools and customized small business

benefits content streamed to brokers websites

More flexible plan designs and employee participation requirements

• Continuum of benefit levels instead of limited options

• Participation rates aligned and consistent across all small business

Expanded voluntary benefits offering leveraging The Hartford’s product portfolio

• Disability Flex, Critical Illness, etc.

Quarterly webinars; Broker Advisory Council; additional tips, facts and survey results

Further enhancements already in plan and being considered for 2013

copyright © 2012 by the hartford. confidential. all rights reserved. no part of this document may...

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