In an increasingly challenging worksite sales environment, insurance carriers must do all they can to make it easy for employers to sponsor benefits. In the face of limited resources, many firms, especially small-to-midsize ones, encounter challenges when administering voluntary benefit plans or educating workers about benefits without support from brokers and insurance carriers.
Carriers that take the lead in employee education, technology and customer service will gain tremendous competitive advantages in coming years.
The voluntary benefits market looks stronger than ever. A LIMRA International report compiling worksite premiums from several carriers reveals that sales skyrocketed during the second half of 2006, leading to year-end sales totaling $1.9 billion in new premiums–a 6% increase over the prior year. Total sales for the industry are much greater. Companies that already sponsor multiple worksite product offerings continue to add even more products to their benefits package.
The market opportunity is clear. LIMRA reports that 10% of the nation's 5 million small businesses plan to add voluntary products to their benefit plans. Small businesses employ half the private sector workforce in the United States, and their ranks are growing. These employers are hungry for business partners that can help them administer voluntary benefit plans.
A critical first step in approaching the small-business market is to partner with brokers who are experienced and successful in serving small to midsize employers. The broker's job requires a great deal of face-to-face interaction with the company's benefit staff and employees. Small to midsize firms want a personal touch. The broker must be able to make a compelling case for why voluntary products add value to the benefits plan.
Employers greatly value their employee benefit brokers, according to a recent survey of U.S. employers by Guardian Life titled "Benefits and Behavior: The Voice of American Business Owners and Benefit Decision Makers Today." Among small employers, a broker's recommendation is the single most influential factor (for 38% of respondents) in choosing a carrier, the survey found.
Brokers, meanwhile, should seek out carriers that provide outstanding administration and customer service capabilities. After all, these services are every bit as important to making a sale as the insurance products themselves. And, if done well, these services can help carriers retain customers.
Large employers typically have well-staffed human resource departments that are used to administering insurance plans. But at small firms, there may not be a human resource department. The company president might also be the company benefits manager. The more services brokers and carriers can provide to relieve burdens from executive shoulders, the better.
One way to provide an extra level of customer service to small employers is to employ dedicated benefit advisors to help educate employees about voluntary benefits. Experience shows that face-to-face meetings are the best way to explain benefits to employees and to boost enrollment. While not a hard-sell environment, such meetings give the products a chance to "sell themselves" once workers have an opportunity to ask questions and learn about them.
Some insurers are so confident in the power of this approach that they are willing to waive the minimum enrollment requirement in group disability, dental, life and vision plans for certain companies that support communications techniques known to increase employee enrollment.
One of the keys to success, for example, is conducting mandatory enrollment meetings during normal work hours. Although it involves a slight sacrifice of time for the employer to do this, the reward is in adding a benefit to the company plan that increases employee financial security, well-being and satisfaction.
