Business groups provide a ready market for agents targeting small businesses
Marketing voluntary benefits through trade associations and other business affinity groups represents an excellent way to increase sales, executives in worksite marketing say.
When an affinity group agrees to allow a voluntary benefit to be sold to its members, it has in effect endorsed your product, they point out. That makes both employers and employees more receptive to a complex sales message, such as insurance.
"When they know someone at the association level has looked into it, that gives a comfort level to individuals," notes Gary Corliss, president and chief executive officer of Avon LTC Leaders, a unit of Manulife in Avon, Conn.
And Clelland Green, executive vice president, USI Affinity Group, Philadelphia, notes there are 35,000 associations of all shapes and sizes, including many professional groups and trade associations. Their members are often small businesses hankering to offer a richer package of employee benefits.
"On the business side, you look for associations where business members already provide employee benefits, then use telemarketing and direct mail as well as a field force to sell your products," Green says.
Products sold by USI Affinity Group include, on the individual side, 10- and 20- year level term products; and on the business side, professional liability, life and disability products, and other employee benefits.
"The hottest products we see right now are health care spending accounts," Green says. "We've had early success and surprising response rates with this product."
His company is partnering with Assurant Employee Benefits in offering HSAs.
In affinity group marketing, such joint ventures are common.
For instance, Manulife recently developed a long term care insurance policy specifically for the affinity market, a product it is selling with the aid of American Insurance Marketing Services, Montgomery, Ala.
AIM, an affinity group marketing firm that sells LTC insurance, helps Manulife customize its product to each association's needs. Manulife offers 35 different riders that appeal to a range of interests and enables it to shape the product to appeal to a given association's members, says Corliss.
Alliances between producers and wholesalers are also routine in affinity group marketing.
"Agents may know someone in an association but have no idea of how to market to their membership base," says Samuel H. Fleet, president and chief executive officer of National Employee Benefits Companies, Warwick, R.I., known as NEBCO. "So, they will call us. They develop the lead, and we assist them in making the sale."
Once a broker develops an agreement with an affinity group to sell to its members, NEBCO mails promotional material to its member lists. It processes the resulting leads, and then sends in its salespeople to follow up on-site.
"There is opportunity in affinity markets, but agents who wish to reach it need expertise and backroom ability to support them," Fleet says.
"More association plans fail than succeed because of the inability of agents to take advantage of opportunities," he says. "They need to ally with wholesale brokerage firms and third-party administrators."
NEBCO develops private-label benefits under each association's name, which it offers through a link on the association's Web site. Employees of member firms can enroll online or call a customer care center staffed by NEBCO employees, where they can get more information and sign up for the benefits they want.
