As clients demand more from their benefit brokerages, the insurance generalist has become an endangered species. In addition to affordable health coverage, employers also expect industry-specific solutions, which requires advisers to have an intimate knowledge of their clients’ industries.
“Overall, clients are not interested in the generalist anymore,” says Jim Blaney, the health and benefits, mid-market practice lead for North America at Willis Towers Watson. To help them appeal to employers, his firm gives its producers access to industry experts, which lets them speak intelligently about different sectors. “Your brand becomes recognized in that industry,” says Blaney.
That approach has been quite successful for the global insurance advisory. Ranked by health premium, Willis Towers Watson is among the top five large-group brokerages across 10 industries, according to the most recent data presented by the business intelligence data analytics firm miEdge and Employee Benefit Adviser. On the carrier side, Kaiser tops the list in nine of the 10 sectors. The rankings were based on the Form 5500 Schedule A data for large-group business submitted to the Department of Labor as of March 1, 2016.
Specializing in a sector allows brokers to discuss specific problems that industry faces, agrees Bill Ziebell, corporate vice president at insurance broker Arthur J. Gallagher & Co. “It’s being able to speak the language,” he says.
At Gallagher, which ranked in the top five in nine industries in the miEdge-EBA study, employees focus on one of seven vertical niches — healthcare, the public sector, higher education, religion, energy, hospitality and private equity. Along with producers and industry experts, staffers with vertical knowledge include attorneys, communication specialists and total well-being experts. “There isn’t any one person who can do it all,” says Ziebell, who manages the employee benefit consulting operations for the north central region. “The expertise needed to be effective is too great.”
More than just insurance
In the large and mid-market, brokers won’t even get a meeting with a potential client if they aren’t prepared to solve more than just the employer’s insurance needs, Blaney maintains. Beyond employee benefits, he ticks off four areas that brokerages need to address to attract and retain clients:
- The Affordable Care Act. “ACA compliance remains a major concern,” says Blaney.
- Talent management. “It’s all about the talent,” Blaney notes. From a total rewards standpoint, “Employers are more interested than ever in benchmarking themselves against their peers.”
- Private exchanges. Many employers are migrating toward private exchanges and are planning to implement them in the near future, he observes.
- Globalization. “Clients are globalizing faster than ever,” Blaney says, and they are looking for partners to help them navigate all of the challenges of doing business abroad, including insurance, compensation and benchmarking. This is especially true in the middle-market, he adds, where the HR infrastructure isn’t as robust and employers are more reliant on their adviser for help.
Succeeding with clients is about more than just expertise, maintains Jim McNary, the North America region health and benefits leader at Mercer, which was ranked No. 1 in health premium in four out of 10 industries by the miEdge-EBA study. He argues that trust is also essential. “You can have the best programs and rates, but if you don’t earn a client’s trust, then you are just another vendor.”
McNary also points to several other factors that are altering the dynamic between clients and their insurance brokers. These include changing workforce dynamics, which contribute to demands to simplify, personalize and tailor the healthcare experience to specific employee segments, as well as the technical innovations occurring in various industries. “Brokers need to stay cognizant of innovations sparked by tech and other disrupters,” says McNary, “as these will change the rules of the game for employer-sponsored healthcare.”
What’s your secret?
Bob Reiff, president of the Lockton Benefit Group, based in Kansas City, Mo., points to yet another factor. Like the employers who are their clients, brokers succeed by hiring top-notch employees. “We recognize that our continued success boils down to attracting and retaining talented producers and associates,” he says. “Our focus is on maintaining and constantly improving a culture that supports our clients and makes us an attractive place to work and do business.
That culture has helped Lockton crack the top five in four different industries per the miEdge-EBA study. To work effectively with clients in a variety of industries, the brokerage hires employees with wide-ranging skills.
“We hire the right people and get out of their way,” Reiff says. “When associates come to Lockton, we provide them with a model and culture that allows them to do what they’re good at.”
The Lockton executive also sees an advantage to being privately held. Not having to be consumed by quarterly results means that “We are able to put our attention on serving our clients.”
Fostering the right business culture is also the key for Gallagher, where a producer needs more than strong sales skills to earn a job.
"Understand the business metrics that matter most [to a given employer] and that highly correlate to better financial and overall business results. Then take that understanding and use it to create tailored solutions that maximize [those metrics].”
“We really feel like we have an exclusive club,” Ziebell says. “That culture is very attractive to the top talent out there.”
Willis Towers Watson, which was recently forged from the merger of the Willis Group Holdings and Towers Watson, banks on the depth of its combined knowledge base. “Diversity across the market is critical,” says Blaney. “Clients are demanding that a broker provide both product and plan design on the health side, as well as consulting on other areas that impact human capital risk.”
Mercer takes a similar approach, which it calls “consultative broking.” In McNary’s view, no matter what industry a client is in, the broker needs to understand exactly what that client is looking for. “First and foremost, we focus on our client’s strategic objectives and business needs,” he says.
“Sometimes client objectives cluster by industry and workforce characteristics, and sometimes not,” he continues. “My advice would be to understand the business metrics that matter most [to a given employer] and that highly correlate to better financial and overall business results. Then take that understanding and use it to create tailored solutions that maximize [those metrics].”
Gallagher’s Ziebell agrees that brokers must learn about each client’s unique demographics and culture. “It all begins and ends with the client and listening to their needs,” he insists. “If one size fits all, you’re not being a good adviser—you’re just pushing products. You have to learn about your clients and customize the right solutions for them.”
