Brokers look to group home, auto benefits for next big payday
Benefit brokers are beginning to realize the relatively untapped market of offering home and auto benefits. Roughly 62% of Americans own a home, according to a 2015 study by the U.S. Census Bureau, and at least 95% of households own a car, according to the State Department. But, only 9% of employers offer auto insurance and only 7% offer home insurance, according to MetLife.
Kevin Chean, vice president of group property and casualty business at MetLife, says auto (81%) and home (73%) are two of the top three must-have benefits employees want from their employers, after medical insurance (89%).
While supplemental health products do tend to dominate the market, home and auto are fairly new benefit offerings that employers are beginning to sign-on to as a way of diversifying their voluntary products, Rob LaHayne, vice president of employee benefits at Namely, says.
“It’s no secret, benefits are getting more and more expensive year over year, so employers are looking for new ways to provide value to their employees,” LaHayne says. “Providing employees with access to other benefits or other perks through the group market is really where they are trying to find value.”
While many employees have home and auto insurance independently from their employer, Chean says enrolling in home and auto through the employer can be more convenient and open up the possibility of receiving more discounts on the insurance that would not be available to them through an individual market insurer.
Chean says the group discount can vary from state to state and vary based on the industry, but having the discount can range between 5% and 25% depending on the employer. The second discount comes through payroll deduction, which Chean says is more efficient than using a credit card. “We see high correlation to retention when offering payroll deduction,” Chean says. “On top of that, we also have a tenure discount, so the longer the employee remains with their employer the bigger the discount we can give them.”
What’s the payoff?
So what do brokers get out of offering a group home and auto product to their clients? LaHayne says as an advisory firm, Namely will put together a plan for their clients at their request, but as a platform provider, they want to offer an employee experience where enrollment can be as streamlined as possible.
“On the Namely platform, our goal is to design an employee experience where they are enrolling and engaging with all of their benefits through the platform,” LaHayne says. “That can include home and auto, accident, critical illness, life insurance, disability, pet insurance and so on.”
Chean says brokers who offer home and auto to their clients are strengthening their relationships with their clients and in the long run can be financially rewarding.
“When an account signs up with a carrier, we see a 96% retention rate, meaning whenever we sign up an account they stay with us for a very long time,” Chean says. “When it comes to the deeper relationship, whenever home and auto products are being offered, we are also seeing high participation rates in the other voluntary products as well.”