Many brokers might want to change the way they do business. A majority of employers are not happy with the service they provide, according to a recently released Zywave white paper. What employers are looking for from their broker partner is changing more than ever, explains Dave O'Brien, division president of insurance solutions at the Milwaukee-based company.
The annual Broker Services Survey asked more than 5,500 employers in a range of industries what they would look for if they were to consider changing their broker.
In the past, the ability to negotiate a lower premium always ranked highest. Last year, 61% of employers said that was highly important - that number dropped to 27% this year. "Brokers focus on price, price, price," O'Brien says. "But the top reasons employers left their broker was because they did not provide the level of service expected, did not keep them abreast of regulatory and legal issues, and did not properly manage insurance options."
Further, Zywave says, as employers demand more service from their brokers, what brokers are actually delivering has decreased - from the employer's point of view, anyway. Employers want to hear from their broker monthly in light of all the change going on in the industry. In the survey, 97% of employers say providing updates on health care reform and other legislation is important, but 23% are unsatisfied with their broker's way of providing information.
A broker likes to tell their story when prospecting, O'Brien explains. "You will see the broker go in and talk about their years in the industry and history," he says. "Employers are saying that is not all that important. What is really important to them [is] ... updates on health care reform and employee communication."
Lynda L. Sussman, EVP and director of marketing at C.O.B. Inc., a Baltimore-area brokerage, has been in the industry more than 25 years and agrees with the findings.
"A lot of [brokers] are lazy and they are all front end - make the sale and go away," she says. " ... They don't give a [darn] about the client."
Before starting her business with her husband, Sussman was a schoolteacher, and says that is how she saw the industry, too. "That is what [outsiders] think," she says. " ... It's a service industry and you have to be prepared to do the whole thing."
Zywave's O'Brien explains that brokers need to do more than say they provide great service - they need to provide examples of it. "Imagine if five brokers walk in and say, 'It's our people and our service.' You have to do more to distinguish that and define what service means," O'Brien says. "How are you going to distinguish? Do you spent a lot of money [on training] making great people?"
The broker/employer relationship needs to be powered by performance and results. "When you talk about service, you have to defend what that means and how you are going to do it," he says.
The Zywave survey, conducted April to May 2013, had 5,536 respondents, of which 33.4% were HR professionals, 15.3% C-suite and 8.7% benefits professionals. Of the employers who responded, 55% employ 100 lives or less, 20% 100-249 employ lives and the rest employ 250 lives or more.
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