When it comes to voluntary auto and home insurance, brokers can't be afraid of the unknown, says Liberty Mutual's Mark Parabicoli.
"There's a lot of fear that brokers have because they've never sold auto and home [insurance] before and they're concerned about not truly understanding all the nuances of the different ... coverage available," says the AVP and managing director of auto and home voluntary benefit programs.
When Parabicoli trains brokerages he tells them, "You need to just arm your producers with an executive summary knowledge of our program."
"They generate the summary of high-level interest, they reach out to the carrier and then the carrier can really get into the full details of the program," he explains.
David Pascale, VP of Spring Lake Heights, N.J.-based Pascale Insurance Agency reaches out to small businesses such as local realtors on auto and home sales because he noticed how many people can be misled by direct writers and insurance agents who don't understand the needs of their client.
Attract plan participants
Any insurance company of value, Liberty Mutual's Parabicoli thinks, should differentiate themselves through product enhancements. "Specifically for employees we have added Employee Parking Guard, which provides additional coverage for their cars when they're parked at work," he says.
Ultimately, employees are looking to save money on products that they have to buy anyway, says Parabicoli: "If [employees] have an apartment or an automobile why not offer these products as a voluntary benefit with the convenience of payroll deduction at a discounted price?"
Tony D'Errico, VP of MetLife's group property and casualty division, agrees. Since car insurance is mandatory in every state, "auto insurance is a door opener for other products," he says.
Combining auto and home
Parabicoli notes that if a plan participant buys a package of home and auto coverage there are additional financial incentives that may attract employees - but the broker must do some due diligence.
Pascale provides an example: "Here's where knowing underwriting criteria plays an important role, especially with certain things such as the age of the driver and the location where they reside in a particular state. [This could make] it easier to split the case between two carriers," he says.
Along the Jersey Shore, Pascale says it's hard to get homeowner's insurance for homes that are located near the ocean. "If agents sell a policy that has exclusions that are abnormal you have to point them out," he urges. "You don't want to be penny wise and dollar foolish when it comes to your clients' needs."
Market to all
There's not a set marital status or gender that buys auto and home insurance over another, so brokers should market to everyone. Parabicoli says it just depends on the employer group. "If you get a younger, single demographic you see more individual auto policies and renter policies, but as people move through different stages of life that may morph into the newly married couple could have the need for a condo policy with multiple cars and maybe an umbrella policy," he says.
Pascale agrees, but has noticed more single people buying home and auto insurance lately.
"Clients tend to be marrying less or in a relationship where they don't want to get married regardless of background or lifestyle," he says.
Protecting assets
Homeowner's insurance tends to be Pascale's main product to sell, despite the real estate market, because people still shop to protect their assets, he says. Although the economy is slow, people start searching to find the best rate, he adds. "When you can't affect your income you can affect your expenses."
The P&C market has become very competitive for this reason and has held down prices that would have otherwise increased in a better economy market, Pascale adds.
MetLife's D'Errico says P&C products are portable, and thus attractive to employees because if they change jobs or retire the coverage stays with them. Group property and casualty growth is between 4% and 6%, he reports.
In the end, protecting employees - especially their home and automobile - is what's most important, says Parabicoli. "It helps me sleep very well at night knowing that we are arming our customers with the right coverage," he adds.
