It has been called a no-brainer: Offering clients the opportunity to facilitate their employees purchase of auto, homeowners and similar property-casualty insurance products at discounted rates through a voluntary program.
Almost 95% of your employees need that coverage anyway, says Donna Rhodes-Joseph, CEO of Rhodes-Joseph Tobiason Advisers, a New York-based benefit consulting firm. Why not let them get a better deal, she asks.
The primary objection to adding this voluntary benefit, industry players say, isnt an objection at all. Rather its an attention span deficit as employers continue to grapple with coming to terms with the Affordable Care Act. Offering something new may simply not be what theyre in the mood for.
On the other hand, it may be just the ticket for employers seeking to expand the scope of their voluntary offerings.
Auto/homeowners is dwarfed by the traditional voluntary benefit categories vision, dental, disability, catastrophic illness and life insurance. The latest estimate on the prevalence of auto/homeowners voluntary offerings from Eastbridge Consultings MarketVision The Employer Viewpoint is 8%, according to Ginger Bates, the companys director of research.
Of note, insurers offering auto/homeowners insurance also typically sell renters insurance and coverage for RVs, motorcycles, boats and personal excess liability.
The prevalence of the offering is highly correlated to employer size, Bates adds. For example, 20% of employers with more than 2,000 employees make auto/homeowner plans available to their employees, but that number drops to 11% for employers in the 501-2,000-employee bracket and only 2% for smaller companies.
Liberty Mutual has been offering the product line via employers for 40 years. Mark Parabicoli, managing director of the companys auto and homeowner voluntary products unit, says strategic thinking-oriented benefit brokers have been taking a greater interest in this area in part because they are being squeezed by the ACA on the health care side of their business and need to broaden their base.
And as employers themselves have been battling with rising health costs for decades, many welcome a new category of voluntary benefit to put in front of employees to add appeal to their program even as they continue to ask employees to shoulder more of the cost of their health benefits.
The break on premiums employees get when purchasing auto coverage as a voluntary benefit tends to be around 10%, Parabicoli says. For homeowners, it ranges between 5% and 10%. When premiums are paid via payroll deduction, they can get another 5% discount.
All policies are individually underwritten.
MetLife, another large player in this space, has calculated that the average employee who buys its auto and homeowners through a voluntary program has saved $509 by switching.
Liberty Mutual has focused on making the product as easy as possible for brokers. Its really a turn-key product for them, according to Parabicoli. Enrollment and other administrative functions are handled by an army of 2,200 sales reps employed directly by the Liberty Mutual.
That doesnt mean that this is a product that sells itself, as the saying goes. Brokers and agents who act as consultants to their clients need to review their clients entire benefit landscape before pitching the product, warns Rhodes-Joseph. For example, if the employer is promoting financial wellness, auto/homeowners could be a natural fit and should be offered on that basis.
Advisers also should examine competitive products before beginning the dialog.
If an employer is receptive, the next step is to map out how it will be introduced and how enrollment will mesh with enrollment for other voluntary benefits, Rhodes-Joseph says.
Stolz is a freelance writer based in Rockville, Md.
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