Administration and service are keys to broker success in the voluntary market
By Nick Rockwell and Erin Marino
rokers are expanding and changing their portfolios of benefits solutions—but that may not be enough to win new clients.
That’s just one of the key findings of the 2020 BenefitsPRO/Eastbridge voluntary benefits survey of producers. The survey collected data in February and March to explore how brokers are adapting to the increasingly competitive voluntary benefits marketplace, and what they’re looking for in their carrier partners. Here are seven ways brokers say they’re striving to differentiate themselves and expand their expertise to stay on top of a rapidly changing industry.
2020 Voluntary Survey
1
Brokers are expanding their product portfolios to align with the growing, diverse needs of employees.
2
Most brokers are shifting their “go to” products to supplemental health insurance.
3
Nontraditional products are gaining ground.
4
Product knowledge is a key differentiator.
5
Service and administration expertise are also critical to staying competitive.
6
Both brokers’ and employers’ expectations for excellent service and administration continue to rise.
7
Billing accuracy and timely claims payments are top priority.
Accident, critical illness, short-term disability and dental insurance are among the top five most frequently sold products by both benefit brokers (defined as those who sell employee benefits, usually employer-paid) and voluntary brokers (those who sell primarily voluntary and include enrollment companies). Term life insurance is the most frequently sold coverage for benefit brokers, while voluntary brokers favor cancer and hospital indemnity insurance in their top five.
Top 5 voluntary products sold in 2019
Benefit brokers
Voluntary brokers
Short-term disability
Short-term disability (tied)
Term life
Accident
Critical illness
Dental
Critical illness (tied)
Hospital indemnity
Dental & cancer (tied)
Nearly two-thirds of voluntary brokers and half of benefit brokers agree their top three “go to” products are moving to more supplemental health coverages, including accident, critical illness and hospital indemnity. This change suggests brokers are aligning their product story with employers’ biggest pain point: health care benefit strategies.
49%
47%
Changes in top 3 “go to” products
Selling more products, such as accident, critical illness and hospital indemnity
Other
Still sell primarily life and disability products
4%
63%
16%
22%
50%
Purchase or vacation programs
Half of brokers say they regularly sell wellness programs, and 59 percent of voluntary brokers regularly sell legal plans. Identity theft and discount health programs are also among the top five nontraditional products sold by both types of brokers. About a quarter of brokers also now regularly sell pet insurance.
And a significant number of brokers say they expect sales of these nontraditional products to keep growing. About a third of benefit brokers expect growth from wellness programs, identity theft coverage, discount health, and financial wellness programs. Meanwhile, voluntary brokers tap identity theft coverage as most likely to grow, followed by legal plans and discount health programs.
Wellness programs
Identity theft coverage
Discount health programs
Legal plans
Pet Insurance
Financial wellness programs
Student loan repayment programs
38%
57%
32%
26%
59%
24%
15%
7%
5%
9%
34%
12%
31%
51%
27%
23%
35%
14%
6%
2%
Payroll advances
3%
30%
Strong relationship with carriers
Benefit brokers Voluntary brokers
Primary basis of competitive advantage
Given the changes in and expansion of product portfolios, it’s not surprising many brokers say product knowledge is their primary competitive advantage.
Product knowledge
Innovative services
Firm brand/ reputation
Enrollment & benefits comm
Strong ben admin/enrollment plat partners
19%
21%
11%
8%
20%
18%
56%
73%
Other technology problems
Claims payment problems
Getting products set up on enrollment or benefits admin systems
Billing problems
Areas of administration by carriers causing pain
Product knowledge may not be enough to gain the edge needed to win employer business—administration and service are also critical. Brokers say they still have many of the same challenges documented in our previous surveys when it comes to working with carriers in these areas. A strong majority (73 percent) of voluntary brokers and more than half (56 percent) of benefit brokers report billing problems are a top carrier administrative pain point. Getting products set up on enrollment or ben admin systems is another significant challenge, according to half of benefit brokers and 38 percent of voluntary brokers.
Administration and service top the list of carrier selection criteria for both benefit brokers and voluntary brokers, with product features/benefits following closely behind. Interestingly, both types of brokers rank compensation near the bottom of their priority lists.
Administration and service Product features/benefits Relationship with carrier’s sales rep and/or staff Product price Carrier that handles the entire case (for voluntary products) Integration with enrollment/administrative needs of the client Underwriting Product availability Carrier provides employer-paid and/or medical products Carrier that provides enrollers Compensation Brand
65%
28%
41%
Both benefit brokers and voluntary brokers agree billing accuracy and timely claim payments are the most important components of administration when selecting carrier partners. Enrollment integration is important to about a quarter of brokers, while the availability of a customer portal is significantly more important to benefit brokers (24 percent) than voluntary brokers (4 percent).
Brokers are continuing to adapt and expand their overall knowledge base to remain relevant with their employer clients. A strong command of a growing number of products and an understanding of how these products meet the needs of a diverse workforce is an important element of maintaining credibility. Brokers also understand the importance of administration and service to their employer clients. While most voluntary carriers are investing in upgrading and enhancing their administrative and service capabilities, some may be quicker in bringing these enhancements to market than others. Therefore, developing strong carrier relationships to collaborate in building and delivering best-in-class service and administration to employers will be a critical differentiator for brokers in the voluntary market.
25%
Portal availability Timely payment of compensation Compensation payment methods
Billing accuracy Timely payment of compensation Enrollment integration
29%
93%
69%
61%
0%
