Growing Your Business With
Affordable Disability and Life
Insurance Benefits Tailored to
Small Employers
Copyright © 2012 by The Hartford. Confidential.
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Big Opportunities
in Small Business
Patricia (Pat) Cronin, LLIF
Assistant 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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Small Businesses Are a Big Market
Size (# of EEs)
Percent
2 to 4
61%
5 to 9
17%
10 to 19
11%
20 to 99
9%
100 or more
2%
Total Employers
5.9 Million
Source: U.S. Census Bureau, 2008 data.
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Stages of Growth
Expanding:
19%
New:
24%
Stable:
42%
Declining:
15%
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Business Demographics
Family-owned: 78%
Female-owned: 24%
Home-based: 33%
Minority-owned: 14%
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Employee Demographics
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
2008
Great
Recession
Percent of Firms
Mid-Late
‘90s
Boom
Source: Small Business Surveys: LIMRA 1994, 2001, 2005, 2012
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Insurance Benefits Offered
Base = All small employers (2-99 employees)
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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 Region
ME
53%
62%
39%
40%
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
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Benefits Trends Over Time
Base = All small employers (2-99 employees)
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*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
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Importance* of Benefits to
Small Business Employees
* 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
• Smaller (but not younger)
• Lower revenue
• Stable (but not expanding)
• Less Likely to have group,
retirement, or executive
benefits
78% of Small Businesses are Family Owned
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Home-Based Businesses
• Younger
• Very small
• Still establishing themselves
• Lower revenue
• Less likely to have group,
retirement, or executive
benefits
33% of Small Businesses are Home Based
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Female-Owned Businesses
• Smaller
• Lower revenue
• Less likely to have group or
retirement benefits
• Less likely to be expanding
24% of Small Businesses are Female Owned
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Minority-Owned Businesses
• Younger
• Still establishing
themselves or expanding
• Lower revenue
• More likely to add group or
retirement benefits in next
2 years
14% of Small Businesses are Minority Owned
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Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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What Does the Future Hold?
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Plans to Add Insurance Benefits
All Small Firms
• 6.5% plan to add a benefit within
2 years.
• Another 8% will “possibly” add a
benefit.
Firms with Benefits
• 8% are considering adding a new
benefit.
Top Benefits Under
Consideration:
Medical
Life
Vision
Dental
LTD
STD
Firms Without Benefits
• 20% may add a benefit.
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
Age of Firm
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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Plans to Drop Benefits
1.3%
• Percent of small
firms that plan to
drop a group
insurance benefit
in the next 2 years
Source: Small World Trends in the U.S. Small Business Market, LIMRA 2012
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What about Health Reform?
Penalties for not offering
health coverage
• Begins in 2014, applies to firms with 51+
employees.
Tax credits for offering health
coverage
• For firms with < 25 FTE employees
SHOP Exchanges
• Until 2016, states can choose cutoff of 150 employees or 1-100 FTE employees.
Wellness Program Grants
• For firms with < 100 employees
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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
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
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.
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.
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
Summer 2012
Fall 2012
Launch of Small Business Center with a
10% more competitive pricing for all Small
dedicated team of pre-sales specialists to provide
Businesses
enhanced RFP service and response
• Extended hours of operation to 8am-8pm EST
Small Business premium now eligible for
• Single phone number and email
The Hartford’s Partner Rewards Program
• Same day call back and <48-hour turnaround
on completed RFP’s
• Consistent positive initial broker feedback
Launch of centralized Sales Team to provide
proactive relationship management for Small
Business brokers
New Small Business website and e-marketing
tools to enable more effective sales efforts
MyTomorrow coverage analyzer tool and
• Online RFP submission tool
Small Business Success Study survey results
• Product guides and e-collateral
now available online
• Small Business webinar recordings
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And we’re continuing to invest in our product and
service offering to ensure your continued success
Further enhancements already in plan and being considered for 2013
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
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