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
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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
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Business Demographics
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Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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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.
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Employee Benefits Landscape
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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
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Insurance Benefits Offered
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Base = All small employers (2-99 employees)
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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ME
Firms Offering at Least One Insurance Benefit by Region
62%
40%
53%
39%
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Firms Offering at Least One Insurance Benefit by Size
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Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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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.
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Firms Offering Group Life or Health Benefits by Industry
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Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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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.
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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
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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
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Female-Owned Businesses
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Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
24% of Small Businesses are Female Owned
• Smaller
• Lower revenue
• Less likely to have group or retirement benefits
• Less likely to be expanding
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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
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What Does the Future Hold?
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Plans to Add Insurance Benefits
Top Benefits Under Consideration:
Medical
Life
Vision
Dental
LTD
STD
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Plans to Add Benefits by Stage of Growth
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Age of Firm
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Plans to Drop Benefits
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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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.
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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.
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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/
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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
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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