The evolution of voluntary: Finding the best fit
The demand for quality service and products has led more than 40 percent of brokers to switch carriers the past three years. How do you find the right one?
Success in the voluntary benefits field has a lot to do with partnerships: brokers, employers, carriers and third party vendors all work together to deliver a product to consumers—in this case, employees at a client’s company.
As we’ve seen in the other installments of this series, offering voluntary benefit products has become common among many agencies, and others are expanding the scope of their voluntary benefits offerings. So, how do you find the best fit?
Related: Voluntary benefits: How they’ve become a must-have product for brokers
What carriers will work best for you and your clients?
It’s the $64,000 question (extra points if you get that reference without Googling it!). Especially for brokerages expanding their offerings, finding a good carrier is crucial.
Experts recommend emphasizing a strategic approach. “We find the brokers that keep their clients are the companies that offer solutions, and not just products,” says Daniel Johnson, vice president of sales and marketing for Trustmark Voluntary Benefits Solutions. “What we ask is, ‘are we listening to our customers?’ We design the product around what their needs are, by doing surveys and focus groups, to find out what they really want.”
Mike Estep, vice president of group products and worksite leader of Guardian Life Insurance Company of America, says the best carriers will work with brokers and employers to meet those needs. “It’s not just a product sell,” he notes. “You’re selling the administrative aspect, claims management, and service. When we see businesses move [to other carriers], it’s usually due to poor service.”
Churning questions
Churn, or changing carriers, is definitely an issue for brokers selling voluntary benefits. A recent BenefitsPRO survey found that more than 40 percent of brokers switched carriers for products in the past three years.
“There is churn, and I think some of that will continue,” says Estep, noting that several factors are at play, including technology, changes in the industry, and ongoing consolidation among brokerages. “When consolidation happens, brokerages tend to move new business onto a preferred carrier, so that drives some of it,” he says.
Marty Traynor, senior vice president of voluntary benefits and workplace solutions at Mutual of Omaha, also sees churn as a natural outcome of a growing market. “The reason there’s been a lot of churn in the marketplace in recent years is that it’s been hard to know which carriers will provide the best service and underwriting solutions,” he says. “As the market has coalesced, many carriers have not been as stable as they should be, and brokers are gradually learning which carriers they can really trust to deliver what they promise at a good price. It’s been a matter of earning your business. You have to put the customer first.”
Sometimes questions arise about whether brokers are switching carriers in order to gain higher commissions, but many experts say this practice is really not widespread. “We really don’t see brokers moving business to get higher commissions,” Estep says. “Nine times out ten the reason is a service issue.”
Pay attention to early red flags
According to Traynor, the products and carriers that don’t work out usually have problems right out of the gate. “What we’ve found over the years is that the first 90 days are crucial,” he says. “If you find something happening in the first couple of months that wasn’t expected, if something goes off the tracks early, it hardly ever gets back on track unless the broker and the carrier really get on that issue right away.”
On the other hand, he added, if things run smoothly and the billing is understandable and accurate, that’s a sign the product is going to work out for the customer. “Red flags hardly ever happen after things are going well,” Traynor says. “But if they go a little awry at the start, unless there’s a lot of attention paid, it’s only going to get worse. And if it goes wrong for the carrier, it reflects badly on the broker as well.”
Better communication=better relationships
As we’ve seen elsewhere in this series, good administration of voluntary benefits is a key way to get customer satisfaction. But again and again, experts say the best fit between carriers, broker, and customer depends on good communications.
“Education and communication is the vital cornerstone of any voluntary benefit program,” says Robert Shestack, CEO of the Voluntary Benefits Association and chief strategy officer of Paylogix.
A recent survey from Trustmark and Customer Benefits Analytics finds that multi-channel communication is the best way to reach enrollees, who often represents different generations, and who consume information in different ways. As other research has shown, different employees may be more receptive to different media, such as email, printed information, and face-to-face meetings.
The research found that “employee engagement, satisfaction, and voluntary product take-up rates are all higher among employees who receive at least three types of benefits communication.” The survey also found that face-to-face communication during enrollment resulted in high rates of satisfaction with a benefits program.