Before arriving at Louisville-based Humana in November 2007, J. Todd Phillips, regional practice leader, large group commercial sales - Southeast region, had a varied background. "My background is not only in sales," he states. He received undergraduate degrees in math and computer science, and then gained work experience in finance, IT, project management, and strategy. This eventually led to an opportunity with an insurance company, where he held the position of a regional chief operating officer. "During that time, however, I also wanted to gain additional experience, so I opted to become an account executive and also a sales rep for the company," he reports.
The many positions that Phillips has had, which involve both direct and indirect contact with brokers and clients, have given him some interesting perspectives on brokers and carriers -- the joys that occur when they work in tandem for the benefit of clients, as well as the heartbreaks and frustrations that occur when they don't. He also has some thoughts on why teamwork doesn't always occur, and what can be done about it.
Virtually all of the outcomes, whether positive or negative, he believes, relate to the attitudes brokers and carriers have toward each other and toward clients. Fortunately, he insists these attitudes are becoming more positive and constructive. The winners, of course, are the brokers, the carriers, and, most importantly, the clients.
"When I started in sales, and even to this day, I still always introduce myself as 'not a traditional salesperson,' " says Phillips. "In fact, for a long time, I resisted even embracing the title 'sales,' because, in my own mind, it had the stigma of the guy at the used car dealership."
When he transitioned to sales from his previous corporate roles, Phillips admits that he was, at first, a bit intimidated by brokers. His impression was that they knew everything there was to know about the business and had "5,000 years of experience." He now likens this initial impression of brokers to his experience when he first started playing golf.
"On the golf course for the first time, in my mid-20s, I was convinced that everyone on the course was very good, and I was making a fool out of myself," he recalls. "As you may know, though, once you get out on the course, you find that everyone is horrible."
In sum, Phillips, now Humana's regional practice leader, large group commercial sales of the Southeast region, soon found out that not all brokers are the "brilliant rocket scientists" that he once thought they were, and that they had to be in order to know this business.
However, he is quick to add, this isn't the brokers' fault. The blams lies in ineffective communication, the result of traditional attitudes that have pervaded the industry for far too long.
Phillips insists the primary responsibility of brokers is to service their clients. But, when it comes to marketing the various carrier opportunities to clients, brokers can have a very difficult time. Why?
"As a Humana employee, I only have to be an expert in 'Humana-speak,'" he explains. "There is also a contemporary of mine at all of the other carriers with whom the broker is working. The poor broker has to try to understand everything each of us is saying, and then try to repeat our 'value prop' and 'our story' to clients."
As such, during his career, one of Phillips's primary goals has been to try to serve as a resource to brokers and help them become more knowledgeable about the industry, about the system, and about Humana in particular.
"I think this approach is well-received by brokers in general," he points out. "The reason is that they realize I'm not trying to compete with them. I am trying to help them become better. I am trying to serve as a resource."
In fact, he is trying, as much as possible, to act as a consultant to brokers.
Another thing Phillips has learned about brokers and carriers is that, "This business is a relationship-driven business."
That is, while it is important for carriers to have tools and resources available for brokers, carriers need to find other ways to make brokers trust them and give them the opportunity to help them with their solutions for their clients.
Phillips also tries to emphasize to brokers that their clients are also his clients.
"To the extent we can partner in coming up with solutions for our clients, this leads to a win-win-win scenario," he states.
In fact, he believes, you can add a fourth "win" -- the individual members.
Don't be a roadblock
Phillips has found that some brokers want to block the relationship between carriers and clients.
"When I find brokers like that, I usually walk in the other direction, because I realize I won't have an opportunity to tell my story, I won't have an opportunity to partner with that broker, and I won't have an opportunity to really drive a true solution for the client -- the one who is paying the bills," he explains.
For everyone to win, Phillips believes, there must really be a two-way, give-and-take relationship between brokers and carriers. For example, just as brokers expect quick turnaround, responsiveness and flexibility from carriers, it should be fair to assume carriers have some expectations, too.
"When we both agree on these, the client is the one who wins," he states.
In the past, Phillips says, many brokers looked at carriers as "commodities" or "necessary evils."
"There was some competition among brokers, but not a lot, because there was enough business for them to grow, especially in the portfolio space," he reports. (For Humana, the portfolio space includes employers with 100 to 300 employees, the space for which Phillips has responsibility.)
In sum, relationships have often been arm's length. The typical communication from brokers to carriers, Phillips says, was often along the lines of, "Just send me a quote. I know what I'm doing. I'll put the numbers in a spreadsheet and send it on to my client. If you win the business, I'll let you know."
The Old Broker
Over the years, Phillips has identified three characteristics among brokers that did -- and still can -- cause problems. Fortunately, he believes, brokers exhibiting these characteristics are dwindling.
"The first is wanting to 'beat you up' as a carrier as a way to try to prove value to the client at the expense of the carrier," he states.
That is, one way some brokers try to differentiate themselves and show their value to clients is by questioning, challenging, and pointing out flaws or problems with certain carriers.
The second is the desire to block access of carriers to clients.
"This causes a communication problem," he explains. "I know how challenging it is for me to just know Humana."
He can't imagine how difficult it is for brokers to try to know everything about Humana as well as all the other carriers.
But the worst characteristic, though, is not making the effort to do what's best for clients.
"I know one broker in particular who could easily save a client millions of dollars a year simply by shifting their business from the TPA they are with, and placing it with a major carrier," he states. "It pains me to no end that this broker is sitting on business and not consulting with the client -- looking out for the client's best interest."
The New Broker
Again, though, Phillips sees things changing, with more brokers replacing traditional attitudes and behaviors with more positive ones. The result is that brokers and carriers are now able to work more closely together. Phillips sees this for the better.
There are a couple of reasons for the change. For one, brokers are much more competitive with each other, and need to rely more on carriers for support.
In addition, employers are starting to realize they can get different services from different brokers -- such as a more consultative approach from one broker compared to another one. Again, brokers are beginning to turn to carriers for assistance with the consultative approach. That is, Phillips has been finding that brokers are now asking carriers more often for ways to help them differentiate their business to clients.
So what characteristics do today's best brokers exhibit?
"The very best brokers, are first and foremost, very keen businesspeople," he replies. "One of the most exciting parts of my job... is the opportunity to learn about someone else's business."
So often, he has found, brokers and carrier salespeople focus most of their attention on what they sell, but forget to ask the clients what they do and what they sell.
"Every time I meet a new client, I think of it as an MBA case study," he states. "As such, I really appreciate it when I meet a broker who shares that same level of business acumen and has a high level of attention to the needs of the client."
Next, Phillips is impressed with brokers who find the best solutions for their clients, personally represent their needs, and provide the carrier with all the necessary insight so the carrier can provide the broker with the best information for the client.
"It's not just about coming up with a plan design and some rates," he emphasizes. "It is about delivering business solutions, and carriers need some 'give and take' with brokers to achieve this."
Phillips also sees brokers more willing to allow him, as a carrier representative, to get in front of clients.
"We recently conducted an ethnography study with benefits administrators," he adds. "We videotaped about a dozen benefits administrators, some of whom are Humana clients, some of whom are not."
The resounding result was that they want to do business with a carrier, and they are begging for consultation, guidance and helpful advice.
"They don't know all the answers, and they acknowledge that they don't know all the answers," he states.
This is where, he believes, brokers can do yeoman service for clients -- providing them with direct access to carriers.
The future for brokers?
"The brokers who understand the businesses of their clients and work to provide them with access to carriers will continue to be the brokers who will be successful," he projects. "Those who decide not to do so will either get gobbled up, or they will get shunned by carriers and won't even have products to market."
In sum, Phillips says, brokers need to understand the importance of adding value to their clients. And, in tandem, they need to understand that the best way they can achieve this is to avail themselves of the services that carriers can offer.
William Atkinson has been a full-time freelance business writer since 1976. In addition to thousands of articles, he has also had eight books published. He lives in Carterville, IL." He can be reached at w.atkinson@mchsi.com.
