The tenuous market conditions and slow economic recovery in which today’s brokers and consultants operate is only the beginning of their challenges. Healthcare reform presents another major change on the horizon. Yet many remain optimistic about the growth potential of the benefits industry. According to the inaugural MetLife Broker and Consultant Study, nearly 40% of respondents are optimistic about growth potentials of their firms despite being wary about the future of their industry.
This optimism paradox highlights the fact that many brokers and consultants see potentials for growing their businesses, and are actively exploring these new avenues as their world evolves. Seventy-one percent of brokers and consultants surveyed are unsure if their clients will continue to offer and pay most of the cost of medical insurance for their employees after healthcare reform. Despite this apparent threat to their traditional income stream, brokers and consultants clearly see a new emerging role. When asked how their roles might differ three years from now, overwhelmingly those surveyed see themselves consulting clients on legal and compliance related issues, as healthcare reform unfolds. Brokers and consultants willing to explore new avenues during this time of change in their profession will be essentially redefining their roles and helping to reshape their industry.
“The challenges faced by employers during this time offer new opportunities for those brokers and consultants who can bring innovative solutions to the table. While wary of how healthcare reform might change their firm’s business models as well as those of their clients, the optimism expressed by brokers and consultants about their own futures indicates confidence in their ability to successfully meet these challenges,” says Anthony J. Nugent, executive vice president, U.S. Business, MetLife.
Seizing the Moment
When asked, more than 80% of brokers and consultants expect their clients to rely on them even more three years from now than they do today, and many are considering new models and strategies in order to grow their businesses. Most popular strategies include enhancing consultant services, selling more voluntary products; and becoming more involved in health and wellness programs. According to the MetLife study, voluntary disability coverage, life insurance and dental are expected to become more important to their firm’s profitability over the next three years. Some brokers and consultants are taking it a step further by adding non-traditional voluntary product options such as auto and home insurance, vision care and legal services. .
By offering voluntary benefits, especially those that round out and complement their medical recommendations such as critical illness and vision insurance, brokers and consultants can offer a more holistic view to their clients’ needs thereby strengthening that strategic partnership. The MetLife study illustrates that 54% of respondents have begun to incorporate voluntary benefits into their marketing approaches; some even have stepped beyond the basics to offer auto and home insurance, legal services, and the like.
Additionally, fee-based consulting services, particularly those focused on helping clients with benefit and cost-management solutions, have become more popular among today’s brokers and consultants both as an innovative and defensive growth strategy in light of the potential for commission-based services to decline. Approximately 75% of all respondents predict that they will spend more time with clients on consulting services three years from now, post healthcare reform.
“While employers continue to be cost-conscious when it comes to benefits, their employees say benefits influence their feelings of company loyalty, even if they are asked to shoulder some of the costs. Therefore, voluntary benefits, consulting services and health and wellness programs can offer growth opportunities for brokers and consultants willing to tap these under penetrated areas,” states Dr. Ronald Leopold, vice president, U.S. Business, MetLife.
By incorporating the above strategies into the evolving business model, there may also be cross-selling opportunities with clients. For example, brokers and consultants that emphasize the value of supplemental levels of insurance coverage on an employee-paid basis will help meet employee coverage needs while mindful of employers’ cost-consciousness. As one broker surveyed said, “Sometimes with our clients, we think medical and then stop… we leave a lot of opportunity on the table with non-medical and retirement products… but there is tremendous growth opportunity.”
Given the challenges today’s brokers and consultants face, MetLife’s study also identified four distinct adaptation profiles that offer insights into the different approaches brokers and consultants may be exploring in response to the perceived changes ahead.
- Core Strivers plan to adapt to the changing landscape by continuing to do what they are doing successfully now – focusing on traditional benefits. They still see growth opportunity in medical products and also anticipate an increase in employer-paid ancillary products, particularly dental and disability.
- Market Expanders tend to focus on medical and retirement products, primarily employer-paid. They plan to grow their business by expanding into new industries and geographical territories and are looking to innovate in the area of international benefits.
- Voluntary Volumizers feel strongly that employer-paid benefits will decline in importance and are placing a strong focus on a voluntary strategy and are looking to innovate in the area of executive benefits.
- Confident Consultants tend to be highly optimistic about both the industry and their firm. They see growth potential in both employer–paid and voluntary products including complementary medical products such as critical illness insurance.
Today’s brokers and consultants may recognize themselves in one or more of these profiles and can use the descriptions to explore additional ideas and opportunities for following their chosen path.
It’s clear that brokers and consultants are facing a crossroads in terms of how they define their role, differentiate their services and prosper in preparation for a post-health care reform world. Regardless of which paths they take, the MetLife study indicates the future role of brokers and consultants in benefits solutions will be distinctly different from today. For more information about today’s broker and consultant outlook on the future, visit www.metlife.com/brokerstudy to download a copy of MetLife’s complete study.