Employees are bearing more health care costs, and in turn, are becoming more responsible for their benefit decisions. That shift has led to changes in the business model for brokerages, says Cheryl Matochik, senior vice president of strategic resources and initiatives at the Council of Insurance Agents and Brokers. Individual consumers are becoming much more powerful and growing forces, she says. Brokerages need to ensure they have the infrastructure in place to have the right client-facing technology to interact with these folks to make sure that everyone internally at the brokerage is all on the same page.
Employers are looking for firms to provide more than just benefits, says Mercer President and CEO Julio Portalatin. More and more, these same clients are looking for us to solve issues that go across the business lines and the HR organizational silos, he says.
Mercer was the top firm of the year, according to EBAs first-ever ranking of the top large-group employee benefit brokerages in the U.S. In partnership with business intelligence data analytics firm miEdge, brokerages were ranked based on welfare revenue based on Form 5500 Schedule A data submitted to the Department of Labor as of Nov. 7, 2014. Mercers health and benefits line of business is now the companys largest single business it generates around $1.5 billion in revenue globally, according to Portalatin.
Maintaining growth means being able to grow both organically and inorganically, says Rusty Reid, chairman and CEO of Higginbotham, a Fort Worth, Texas-based firm that saw more than 21% growth in the last year.
Its really important to know that were as focused on organic growth as an organization as we are finding new partners to bring into the organization. We view that as a duel strategy, he says.
Since the passage of the Affordable Care Act, compliance has been a major concern for employers in the last few years, however, Higginbothams COO and Managing Director of Financial Services Michael Parks sees that emphasis waning. Going forward, a lot of it has to do with other services that we can provide, whether its administrative or technology, he says. More and more of our companies are enrolling online and they need the tools to do that, or help with the tools they currently have to make it work.
Bob Reiff, incoming president of Lockton Benefit Group, sees data and technology capabilities playing an increasingly important role in a brokerages service offerings in the next five to 10 years. We know having big data is essential in supporting the employer strategy targeted at risk reduction and population management, he says. Technology is going to continue to play an important role as exchange and enrollment solutions evolve, as well as health care transparency tools that provide employees with the information they need about cost and quality to choose the best care at the best price.
As the end of a decade of tackling health care delivery and cost challenges nears, Portalatin sees human longevity as the next frontier. I think youll see on a much more heightened basis the whole issue of the impact of longevity has on individuals and whether or not they have enough savings or have planned enough to really have a living standard that they are comfortable with for their later years, he says.
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