Brokers writing voluntary cases with traditional group carriers are far more likely to be taking over an existing case than are their individual counterparts. Brokers writing with traditionally individual voluntary carriers write far more virgin cases.
These tendencies track with the historical business practices of each type of producer. The traditional group company broker sells employer-paid and core coverages along with voluntary, and in those traditional benefit plans, takeovers are the way of life. The market is fairly well saturated and new cases are hard to come by. As these brokers have added voluntary, they have treated the market opportunity the same way, primarily by looking within existing account relationships for opportunities to replace existing voluntary coverages placed by other brokers with their own, superior solutions.
Brokers producing for the traditional individual companies are far more likely to have come from a voluntary/worksite tradition, one that was likely to depend on selling new cases or selling additional coverages in existing cases. As a result, both types of brokers today are following in their traditional footsteps, primarily selling virgin coverage or takeover business, as they've been trained to do over the years.
But one challenge for group, employee-benefit brokers, has been to expand their account book of business. It's been difficult to add new virgin accounts because there were so few available. For many, takeovers were the only way to consistently grow their block. If there had been ample virgin employer-paid opportunities, brokers would have pounced on them. But the realities of the market have meant that takeovers are the norm. And for some, their virgin case radar and virgin case selling skills have atrophied.
Virgin cases take more work. Brokers have to sell new coverage to the employer and then market it to employees.
On the other hand, this could be a once-in-a-decade opportunity to write virgin business and add new cases. If your voluntary practice is focused on taking over voluntary business rather than bringing in new customers or bringing new products to those who already have voluntary, you could be wasting a golden opportunity. Sharpen those selling skills and get prospecting. More than 45 percent of all U.S. businesses with more than 10 employees still offer no voluntary benefits. But remember that, like all others, this window of will close.
Gil Lowerre can be reached at (860) 676-9633 or glowerre@eastbridge.com.
Bonnie Brazzell can be reached at (803) 738-1236 or bbrazzell@eastbridge.com.
