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.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
