You probably already evaluate the portability of each product as a part of your carrier/product selection, but do you fully understand the programming and support they offer? (Photo: Shutterstock)
In part one of this series, we posited that to get the most from a sale, both a highly integrated communication strategy for initial enrollment and a well-defined re-enrollment strategy were essential. But is there another piece of low-hanging fruit that you are overlooking to help maximize case revenue?
As workforce demographics change, and as the average employee tenure at any given company grows shorter, what actions are you and your carrier partners taking when employees change jobs or retire?
Bonnie Brazzell and Nick Rockwell, Eastbridge Consulting Group, Inc.
You probably already evaluate the portability of each product as a part of your carrier/product selection to ensure employees have the contractual right to keep their coverage. You may also evaluate whether the employee can keep the same benefits at the same rates or whether there are restrictions. This type of assessment is a great starting place.
If you view portability like many insurance carriers do, your evaluation process may stop there. This graph from our conservation research suggests that more companies view portability as a contractual right that must be honored at a minimum, as opposed to being a way to maintain and grow revenue.
However, you can do more to understand what kind of programming and support your carrier partners have in place for ported policies to safeguard your revenue stream and profitability for their company.
Ask your carrier partners what their retention rate is for ported policies. While a few carriers in the research list rates in the double digits, one as high as 20 percent, most carriers retain between 5 percent and 8 percent of their policies through their conservation efforts. In addition, many carriers do not track persistency at all. This question allows you to get a pulse on how serious the company is about retention.
Do they pay commissions on ported coverage? Some do, some do not. Make sure incentives are aligned to their program.
Do they send any communication directly to employees when their coverage lapses? According to our recent Billing Practices report, 60 percent of carriers do not send any communication directly to employees when their coverage lapses or if the entire group lapses. Many carriers are hands off and see employee notification as the employer's responsibility. This is an area where you may win points with employers by advocating for less employer involvement in this process and more carrier initiative.
If your carrier sends a communication, what kind of communication is it? Our research has found that most carriers send a simple premium due notice and only a few take the opportunity to re-market and re-educate the employee on the value of their coverage through marketing communications or customer service interaction. Demand more.
Armed with a deeper understanding of your carrier partner's port-marketing program, you bring a nuanced approach to carrier selection to ensure that you are truly getting the most from a sale.
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