Andrew Bard, vice president of sales for Indianapolis-based HCC Medical Insurance Services, made his way from an Indiana farm to the burgeoning world of international medical insurance. And he sees big things ahead.

Benefits Selling: How did you get started in the industry?

Andrew Bard: My first job was with State Farm. They were trying to diversify from being just an auto and homeowners insurance play to selling various kinds of products, including life insurance, health insurance and a bank product. So they brought in a bunch of consultants and the idea was these people would work with the traditional agents' book of business that they had been selling homeowners and auto policies to and would try to offer more lines of business to them. So my focus for about two years was trying to sell those products to the consumers who were already buying auto and home policies from State Farm.

Working for a big company at the time was great because it came with good security and they paid pretty well, but the next step at State Farm was to be your own agent, to own your own agency. And frankly, I was 24 years old and I didn't think I was ready to own my own agency, nor was I willing to take the financial risk of doing that.

I found my current job in the Indianapolis Star in the Sunday classified section. How many people found their job that way? It was very small at the time; there were about 20 employees.

At the time, the company was only doing international health insurance. They were selling products to people who were traveling outside their home country and people traveling to the U.S. I met with them and I could tell the owners of the company were very successful. And I went home from that interview and thought, “This is a product I've never heard of, never really considered the need or want for it, the market space for it, and they're extremely successful. This seems like something I can do.” Getting recognized at somewhere like State Farm is extremely difficult where you're never going to get a chance to talk to decision makers, so moving to a company with 20 people, reporting directly to one of the owners, was very appealing to me.

I grew up on a farm in southern Indiana, and then went to a very small high school and college. My whole life, I'd been used to this small kind of atmosphere where people were listening and there was this idea that I could drive change or drive decisions, and that was very appealing to me. Benefits Selling: What does HCC do?

AB: HCC is a very large insurance holding company. They're a specialty insurer and they acquired the company I was working for in 2008. They own about 40 subsidiaries around the world. HCC does various specialty lines of business globally, both

in the P&C market and the life and health, or life and accident market. What we do here specifically in Indianapolis is travel medical insurance, so health insurance for those traveling outside their home country, whether it be from the U.S. to another country, or another country coming into the U.S. We provide international student plans that are kind of tailored toward a secondary student who is studying outside of their home country. It's a specific visa type called an F1 visa, and there are about 750,000 of those in the U.S. at any given time.

Benefits Selling: What does international medical offer brokers? Why should they consider selling these products?

AB: I think a big part of it is diversifying their book of business. Several things have come out of health care reform. One of them is commission reduction—so acquisition cost of business for the broker or distributors of health insurance products have probably gone up slightly, because I think there's still the same amount of competition from a broker standpoint. But I think there was a hefty reduction in commissions as a result of reform. So brokers are looking to diversify their lines of business. From a short-term travel insurance market perspective, health care reform didn't really impact those types of plans significantly enough that carriers reduced commissions. So one of the reasons from a broker perspective is that the commissions are much higher than what you get paid on traditional domestic health insurance plans.

I think the other reason is when you look at global travel trends as the economy has recuperated over the last couple years, there's just a lot more people traveling. There's more money to spend and as a result, more people are traveling outside their home countries. The thing that's growing the market significantly is that all the baby boomers who are in the U.S. now have the financial ability to travel. And a lot of them are retiring, they've got money to spend. So this is a product that has a defined market that is growing.

Benefits Selling: This is a young product, largely sold online. What challenges and opportunies does that present?

AB: Yes, a lot of our products are sold online. There is still a traditional channel to sell them, but a lot of them are sold online. A lot of insurance products in general are sold online now. And consumers don't want to go to multiple websites. If they find a website where they're comfortable buying health insurance, whether domestic or international, I think the likelihood of them coming back to that website when they're travelling is very high. So, providing a one-stop shop for health insurance for any need is very important and I think that will continue to progress over the coming years.

Benefits Selling: Where do you see the distribution of this product, and insurance in general, going in the next few years? Should brokers be worried?

AB: No, I don't think brokers should be worried at all. I think brokers should invest in a good website. They can continue their traditional role of talking with someone on the phone, meeting with them in person and selling them insurance, but I think that if I was a broker, I'd be investing in technology to be able to deliver those same sorts of products on the Web.

Benefits Selling: So embracing change and working with it, rather than resisting it?

AB: One of my irritations about the couple of years when PPACA was rolling out was there was so much grumbling and complaining about what it was going to do. And looking back at it, the people who I've seen become extremely successful post-PPACA are the ones who, instead of spending the time complaining, they embraced it and said, “Listen, this is coming. I'm going to be ahead of it. I'm going to spend the next two years learning about it so I can inform my clients about what it is, and how it impacts them.” Those have been the brokers who have been extremely successful.

Benefits Selling: Where do you see products within this niche going in the next few years?

AB: I think the carriers in this market realize that consumers have various insurance needs while they're traveling. Historically, a lot of the products have been specific to health insurance, for example. I think you'll see carriers bringing in other products to sell to that consumer, adding in other services and benefits to those existing products. So, accidental death and dismemberment coverage, trip cancellation coverage, various insurance products that people typically buy, but they need when they're traveling internationally as well.

Benefits Selling: What advice would you offer brokers who are interested in breaking into this market?

AB: I think as with any market, do some research. Look at the competition out there. The first thing to consider if you're looking to get into a new line of business is, are you committed to that line of business? And if so, who is the competition? Who do you need to beat out there to drive sales from a consumer? So, a review of the marketplace. You start with a simple Google search. Ninety-eight percent of our travel plans are sold online, so I would focus on the online marketing that your competition is doing and try to figure out how you would fit into that, what play you would make.

You also have to evaluate your ROI. So, figuring out what the average cost is of a plan, multiplying that by the commission you make and figure out how much you need to spend to acquire that business. And I think one of the luxuries that this marketplace I'm in offers is that we still pay higher commissions than health insurance plans, so the ROI for a broker can look very attractive once they do that math.

Benefits Selling: The insurance industry has been notoriously slow to adapt to technology at times. What technological advance are you seeing right now in the market? Mobile? Apps?

AB: You know, I'm not convinced on mobile apps being the next big things to come to health insurance. The difficulty with creating a mobile app is you can create the prettiest, sexiest mobile app in the world, but if you don't have some reason to get consumers to download that app, it's essentially useless. And as mobile-friendly website continue to grow, everybody's got a smartphone and anybody can go on any mobile-friendly website and submit claims, review providers—do essentially the same things that an app can do.

I think one of the biggest steps is improving delivery methods and the quoting and purchase process for consumers. When I started, the average consumer spent maybe 10 or 12 minutes filling out an application for a five-day travel trip and now they can do that in less than half of the time, so four or five minutes. Improving that user experience is going to drive the future of the product.

Benefits Selling: Innovation and adaptation are two terms that keep coming up as I talk to people in the industry. What are your thoughts on the importance of these concepts for both individuals and the industry as a whole?

AB: I think innovation and adaptation are extremely important, regardless of which product or widget you're selling to the consumer. Think about Apple for example. They're continually driving innovation and adapting to what their users want, and they're extremely good at it. I think carriers in this marketplace absolutely need to innovate and adapt; I think they need to listen to consumers, take that feedback and make changes based on it. Whether that's from a user experience on their web interface or from a product benefits standpoint. It's much easier to listen to people and develop ideas than to come up with them on your own.

Benefits Selling: As things move increasingly online, do you have any fears about losing the human element and the importance of relationships?

AB: I think it's very important. From a carrier perspective, we're a bit removed from the consumer experience on the front end—the purchase process. So it's extremely important for us to be in touch with our brokers or our distribution channel because while 98 percent of our policies are sold online, they still may talk to a broker and give them feedback. Keeping those lines of communication open is a must.

I think reviewing social media posts about your products is also very important. While that may not feel like a human interaction in its traditional sense, it's still feedback that your consumers are sharing with whoever reads their posts. We have resources dedicated to scouring social media to see what people are saying about our products, whether it's positive feedback or negative feedback, you need to stay on top of it.

Benefits Selling: And as millennials and other younger consumers make up a bigger part of the marketplace going forward, that will become increasingly important.

AB: From a social media perspective, people probably aren't going to go out and tell everyone that you paid them on time and adequately. But if you don't pay that claim on time or you do pay it inadequately or inaccurately, then the likelihood of them going online and telling the world about that is very high. That service aspect is becoming extremely important for your reputation and for future sales.

Benefits Selling: There's still something to be said for the personal touch.

AB: Yes, the human element is still vital. Regardless of whether you sell a product online, people still want to be able to pick up the phone and contact an agent if they have questions.

And similarly, anyone who does online marketing knows that content is king. You have a human writing that content, you have a human on the other end reading that content, so there's still human interaction involved in an online transaction. It's important to have good, creative, thorough content on your website.

Benefits Selling: In closing, tell me why you're optimistic about the future. Why would you encourage people to come on board?

AB: Insurance is something that people need; there will always be a need for it. People want to protect themselves and their assets and the best way to do that is through insurance.

In general, I'm optimistic because I don't foresee a time when people don't need insurance. Those insurance products will obviously evolve and change over time but the need won't go away.

Specific to my market, international travel is up globally. The economy has been positive and people continue to travel. Anytime people are traveling, there is a need for my product.

Instant Insights /

International medical insurance: A new world

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