Benefits brokers understand as well as any the challenges human resource managers face to provide a robust, competitive employee benefits plan. Rising health care costs mean employers must pass along a greater share of expenses to their workers, which, to them of course, means incrementally smaller paychecks.
Benefits brokers understand as well as any the challenges human resource managers face to provide a robust, competitive employee benefits plan. Rising health care costs mean employers must pass along a greater share of expenses to their workers, which, to them of course, means incrementally smaller paychecks.
And it doesn't stop with their current work force. According to the Kaiser Family Foundation, 10 percent of the nation's largest employers eliminated future retiree health care benefits in 2003, and 20 percent said they would follow suit by 2006. At a minimum, nearly all expect to increase retiree contribution requirements this year.
Voluntary benefits emerged in the mid-1990s and early 2000s as a cure for these paid-benefit ills: Give employers more stuff that would cost them little or nothing at all and employees hopefully won't smart as much from the health care bite. So innovative products were born: critical care insurance, pet insurance, pre-paid legal services. Each provides value -- to someone. But of this growing menu of offerings you can put into your medicine kit, only one will benefit the majority of your clients' employees: auto and home insurance.
True enough, employees who drive cars -- who, safe to say, are the majority -- need auto insurance. And mortgagors require homeowners to have home insurance. A voluntary group auto and home insurance program arguably provides more value than any other benefit in your portfolio -- it saves your customers' workers money (potentially hundreds of dollars) on something they need to go out and buy anyway.
But altruism aside, why would a benefits broker want to add a property-casualty product to their portfolio?
Obviously, with voluntary benefits increasingly popular among employers, you aspire to be your clients' one-stop shop for as many of these as possible. Further entrenching programs with clients will serve to make you that much more invaluable or, irreplaceable. And high participation in a must-have-product program -- the ultimate end game -- will boost the bottom line.
"More than any other product, auto and home insurance opens doors for us to our clients' other programs, both voluntary and core," says John Gannon, a principal and voluntary benefits practice leader with insurance broker Hilb, Rogal and Hobbs in Boston. "The key is it delivers something of value to employees more competitively than they could get on the street. And because it's a product nearly every person needs to buy, an auto and home insurance program is by far the surest to generate a success story for the HR or benefits manager, too."
Participation can be found
Of all of the metrics available to measure program success, participation rates might be the most telling. Simply put, if employees are enrolling, it's working. Most voluntary benefits generate single-digit participation rates even after four or five years on the menu, and for a variety of reasons. Lack of interest by or applicability to a sizeable portion of the employee base might be the most common. Another might be an ineffective or nonexistent worksite-marketing program to make the participation needle jump.
Employer-sponsored auto and home programs are no less immune to potentially modest participation levels, so how do you ensure your auto and home program will outperform employer expectations?
With the right insurance partner and employer support, first-year participation rates can approach 10 percent and five-year participation levels can score between 25 percent to 35 percent.
Here are some tips to choose one that puts you in prime position to succeed:
1. Flexible is good; rigid is bad. Think for a moment about your own buying preferences. If you like to transact face-to-face you might be less inclined to do business over the phone. Or if you don't need or want the human touch in the process, you might shy away from buying from a company that makes it necessary. So to remove the "channel barrier" as a possible participation deterrent, offer clients a program from an insurance partner with multiple sales options. Giving employees the choice of how they wish to obtain a rate quote or enroll (through an on-site representative of the insurance company at the work location, by visiting with an insurance representative at the local office, over the Internet, or by calling a toll-free number) makes them more empowered in the process, and more likely will heighten interest.
2. Be repetitive, then say it again. Unlike company-paid benefits such as health and dental coverage, people generally do not make auto and home insurance decisions during open enrollment season. True, many employees will shop once or twice a year -- when their car or home policy is up for renewal -- but in the auto and home world, that once or twice a year comes up every day. Select an insurance partner that will create -- and even implement -- a strategic, 12-month communications program for your client to ensure consistent visibility of the program. This might include program endorsement in the employee newsletter, materials in new hire orientation packets, direct mailing to employees at home or desk drops at work, displaying informational posters in employee break rooms or cafeteria, and inviting the insurance company's sales reps on-site to answer employee questions or to complete enrollment applications.
3. Aspirin-free administration. Clients tell you all the time that they don't have the resources or patience to manage a new voluntary benefit, nor budget to get it up and running. Your response? Tell them to imagine a benefit that saves their employees money, yet costs the company nothing; a benefit that gives employees the convenience of participating through payroll deduction or automatic checking account withdrawal, yet requires no monthly maintenance by the HR department. Lastly, tell them about a voluntary benefit that can be tailored to fit their existing payroll systems, without the need to pigeonhole them into the vendor's. Then present them with an auto and home program that delivers the picture of paradise you have painted.
4. Look for the value, then deliver the value-add. Lots of insurers boast the savings they can deliver to your clients' employees. The value in group auto and home is a given: Employees save money on a necessary product. But progressive employers will be keen on the value-add a particular program brings to the table. Two things generally come to consumers' minds about auto and home insurance: 1) How much does it cost; and, 2) Will the company quickly and fairly settle my claim. Since every insurer will compete on both of these concerns, look for one that stands out on a third: helping workers and their families stay safe in their cars and homes. Ask about the worksite educational programs -- teen driving, child passenger safety, home fire safety, identity theft -- an insurer can offer your clients.
5. Be relevant and be good. Many of your clients may have multi-state operations, so any benefit you bring them should be domestically border free. Don't limit the success of your auto and home program to the geographic availability of the insurer, by making sure it writes in every state where the client has employees. Lastly, look to team with an insurer that is financially secure and has a track record of providing quality products and services to groups like your clients. The insurer's customer retention rates are a great place to look for signals of their performance.
"Group auto and home insurance is a perfect lead sell because it is conceptually sound and easily understood, and is proven to be popular among employees," HRH's Gannon says. "With the right insurance partner -- one that delivers a competitive product and backs it up with exceptional claims service -- you're sure to hit a home run every time. No other benefit comes close."
From the January 2006 issue of Benefits Selling Magazine • Subscribe!
