Lowered commissions, increased competition, loss-ratio mandates,buying direct from exchanges, carriers withdrawing from the medicalmarket, and on and on and on. While it has become fashionable forindustry pundits to talk about the impending demise of the broker,benefit managers and employers tell the real story. In a surveyreleased in early 2010, the majority of benefit managers said theyuse a broker for their benefits package.

The exact percentage varied by size of the case as seen below:But even more important than the percentage using a broker is theincreasingly important role the broker is playing. Several yearsago, benefit managers felt that the role of the broker was“secondary” and that they were doing much of the due diligenceand/or decision-making. In the more recent survey, however, almosthalf (48 percent) of benefit managers said their broker eitherinvestigates the alternatives and makes recommendations or is theirtrusted advisor whose advise they typically follow.

It appears that the increasing demands on the benefit managers’time and the complexity of putting together a comprehensivebenefits package while controlling costs are taking their toll. Asa result, today’s benefit managers are looking to brokers to helpthem out. Those surveyed said that they would prefer to purchasebenefits through a broker or consultant than through a businessassociation, TPA, or even directly from the insurance company. Thegood news is that when considering voluntary products, benefitmanagers are open to any broker who brings them a good idea or goodproduct.

In fact, when asked from whom they prefer purchasing voluntary,most said it makes no difference. If brokers are an endangeredspecies, no one seems to have told the buyers. So it’s up to you todecide whose opinion is more important: buyers of your services orthe pundits of pessimism?

Gil Lowerre can be reached at (860) 676-9633 or [email protected].Bonnie Brazzell can be reached at (803) 738-1236 or [email protected].