Last month, we talked about the impact of employee turnover and the amount of sales effort required to replace those losses. Our conclusion was that a basic conversion program helps brokers get off the attrition treadmill and use new account sales to grow the block rather than stay even.
If an important part of conservation is helping departing insureds to keep their coverage through a non-payroll remittance mechanism — then the key question is, “How do we improve our (typically) 5 percent conversion rate?” The most important step is to use a carrier’s conversion program as one of your criteria in selecting a carrier in the first place. How good is their program?
How do they research their process and its effectiveness? Unless you work with one of very few carriers, you’ll find that most insurance companies do very little to encourage conversion. They probably supply the plan administrator with some brochures and forms and hope for the best.
You can bet that, within a few months, the brochures and forms have been “filed” away and little is done by anyone to help departing employees keep the coverage they need and have been paying for. In many cases, it’ll be up to you to help the carrier understand what needs to be done. And only pressure from you and your peers will get them to do it.
The heart of any program is proactive contact. Reaching out to them — by mail, email, or by an outbound call center — is by far the most effective approach. Here are some of the keys to an effective program:
Let the employee know, as soon as possible after dropping from the list bill, that they have an expiring right. Get the employee to listen to the presentation, and then offer them a simple solution.
Focus on the product and the reasons the employee bought it in the first place. It’s a needs-based resell and can be accomplished in a paragraph or two. Keep in mind there are different motivations underlying consumer interest in retaining the coverage. Some people respond best to emotional appeals involving caring for family, testimonials, etc., while others are more open to analytical appeals regarding original age-based rates or guaranteed issue.
End the presentation with a simple, quick option for continuing the coverage, typically putting the premium payment on an ACH or credit card basis.
The only “don’t” is obvious: Don’t rely on the account’s plan administrator to control how many departing customers you lose. They are busy people and this may not seem like an important business activity. After all, those employees are leaving.
Carriers who have built these processes into their package have found them to be rewarding in several respects. First, the carriers — and you — get to retain a very large block of business, thereby boosting the net impact of their new sales efforts (it’s not just replacing lost business).
Second, most of the business is seasoned, and much of the acquisition cost has already been incurred. Third, the rescued business performs much better, adding better risks to an otherwise subpar pool. Also, their package is enhanced, attracting savvy brokers, and, they’re doing the “right” thing.
The best approach isn’t to set up your own process, but to lobby your carrier (or TPA) to set up a conversion system as a basic part of their offering package. Do the right thing and demand excellence from your carrier partners.
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