Jim Davidson, president of EOI Service Co. Inc., remains as upbeat as ever. Not that he isn't concerned about what he's sees going on around him -- growing layoffs, falling home values and nervous employees -- but Davidson's cool confidence is based on years of experience and continued growth in the voluntary market.
And there's little doubt he knows what he's talking about. He jumped into the voluntary business 30 years ago with the birth of EOI. A few years later, it's all he was doing.
"We're a benefits communication enrollment firm, so we work with employers to help them further their human resources strategies, mostly around employee retention," he explains. "And we do that by providing value-adds, whether it be total compensation statements, enrollment of core benefits, benefits promotion, wellness promotion, or other employer messaging. We can become the arms and the legs out in the field of the human resources department. Employee surveys are also part of it. So our strategy is to really become part of employer human resources strategies."
Obviously, Davidson's considered an expert in the field, penning several articles, speaking at various life insurance and benefits industry association meetings across the country and being recognized by his peers as a runner up in our own Broker of the Year balloting last year.
Davidson is a past director of the Chicago Association of Life Underwriters, and a past member of the Employee Benefits Committee of the Illinois CPA Society. Davidson is also a past President of the International Society of Certified Employee Benefit Specialists.
BS: How have you seen your business -- and the industry as a whole -- change over the last year or so, especially with the economic downturn?
JD: We're surprised to find that it hasn't hurt us at all. We did anticipate with reduction in consumer spending that people would stop buying voluntary plans. But it really hasn't happened at all. We surmised that and I guess we can all take this to heart is you've lost a third of your 401(k) balance, your house is worth 25 percent less than it was, in Denver maybe it's not quite that drop, in California it's a 40 percent drop. So I'm less secure, I don't have the assets. If I have a problem, I don't have the assets to fall back on that I had two years ago, do I? So maybe now I need insurance more than ever. So that's the message that we're taking to people that, you know, when investments aren't there the insurance is. So we think that's perhaps why our sales haven't felt it at all. And we made a major investment in people and training over the past three years and over the past five years in systems and processes so that we compete extremely well. We're told by people we work with that our processes and structure and enrollment organization is better than our competitors, more complete, better documented, better controlled and so I think that is helping us with market share as far as acquiring new clients and the other is part of the enrollment strategy on site, so business is good.
BS: So what is it that sets your business apart from your competition?
JD: Our competition or where we get our business is from third party referrals from brokers. So a lot of it, in fact more these past few years, has been from the very large brokers. Now that they've kind of awakened to voluntary benefits, we've again refreshened our company so that we can operate in the transparency environment as they call it at Marsh and Aon, you know, after the post Spitzer days, that we can operate very well in there and deliver at the level that a big publicly held company needs. And so that's been very effective for us to get a lot more business from them and now that they're paying attention to it because they need the revenue it drives it well for us. So it's nebulous. You know, to really put your finger on what makes us different one is that we have people that stay with us for a very long time. I go out and make presentations and I say, "Here are the people you're going to work with. This guy has been here 25 years, this guy has been 22 years, Lisa has been with us for 17 years." We have an extremely experienced team that likes to work together, we've created a community here of people that really work very hard to serve clients extremely well, to treat clients well, and that is something that is different. It's hard to tell externally but it is part of it. And then again, all the process of documentation, the time we take to make sure that everything we do is consistent and high quality. We're kind of gaining market share so speak within Marsh and Aon and on others is they're maybe not working with enrollment companies as they did before, we're kind of getting a bigger share of the pie internally.
BS: What do you see for 2009, how do you see things going and what do you expect for next year?
JD: I'm fearful. I had somebody talk to me the other day, a consultant in here saying, "Well you're kind of immune to a recession." I don't want to think that. That's smug, and we're trying not to be smug. Things are going well and we've really got to make sure we've got our eyes open and we're not missing something we should be, that we're not being too smug. But our plan is for sales to grow by 20 percent. We're looking to add salespeople because we see our market as a good one. A lot of our work is in health care. Maybe the only industry, certainly one of the few, where employment is growing month to month and we can't anticipate what would cause that to change, so we think we're well situated there, as well. So we're looking for growth. And pretty much doing what we've been doing and that is providing the messages that employers need to keep their employees happy, keep their employees engaged.
Dependent eligibility verification is something we're doing [more of] right now. That's kind of becoming of the moment and it's a way for an employer to finally reduce some costs.
BS: Product-wise, is there anything in particular you see coming of age this year?
JD: I believe critical illness is a product that's going to continue to take off. There might be enhancements that have been made to that, so you've got the multiple benefits that come out, maybe a more robust wellness feature to it. I have long been enamored with life insurance with long-term care riders. It's a magic product to me and there continues to be a great demand for it. I'm not seeing anything else that's going to come up all that strong, [such as] legal plans, pet insurance ... we don't sell it.
BS: What would your advice be to someone new in the business or someone who's struggling right now?
JD: Get training, training knowledge. We, as part of our process here, always pushed education on our employees. We write it into their annual plans, their expectations that they will go out and find courses and we'll find them for them and take exams. So I'm a huge promoter of CEBS. They need to be serious about their business, and they need to have the technical knowledge to be able to bring value to their business. And I think that you look at the marketplace other agents aren't in, and that's why I'm in this business. People didn't want to do voluntary plans 20 or 30 years ago and so that's where we are. Niches today are consumer directed health plans -- a lot of agents shy away from those because of commissions [or lack thereof]. But it should be all about client service.
BS: How do you see consumer driven plans going forward?
JD: And certainly that's a position we're in. We are a consumer-driven health plan company. We use this for our marketing in that every one of my employees -- we don't have anything but CDHP here. We have a high-deductible health plan with an employer-funded HRA with incentives for personal health assessments, among other things. So we're a full wellness CDHP company, which enables us to then go out and provide a unique service to our clients because our people who are talking to their employees have been in an employment program for a couple of years.
Now who knows what's going to happen with the change in [Washington] D.C.? The Democrats in congress have not been big fans of HSAs and HRAs, so I don't know if it's all going to go away. There are 13 million participants [nationwide] and that probably is increasing during this open enrollment season. So that's a lot of people to take the benefit away from, but I'm not sure where the future of consumer directed health is.
BS: One last thing: how are we doing -- as an industry --in catching up on the technological side of things?
JD: Yeah, I'd say [we're] still way behind banks. We struggle reporting out to insurance companies, just our internal [communication] not even the consumer facing. So why is it I can't do online insurance like I do online banking? Why is it that insurance companies can only send me commission statements on paper and not e-mail or give me Excel spreadsheets I can manipulate and audit myself? I think it's way behind. Way behind.
Now on our client facing stuff, we are creating all sorts of things. We have our own proprietary core benefit enrollment platform we built ourselves. We built our own software for benefit statements for clients. We built in-house enterprise systems for tracking our business and processes, so we've embraced it. We say we're not a technology company, [and that] we're a people company with real good technology, but we're not a technology-driven company.
We need to adapt. I mean, I can't be the old guy out there who wants to do things the way we did it 10 years ago because it's not what the customers need.
