CHICAGO — Insurance carriers and brokers have an obligation to do things differently and in order to survive must begin to stand out in a marketplace that is drastically changing, says John Penko of Benefit Solutions.

Speaking Monday at Employee Benefit Adviser’s Workplace Benefits Mania Conference at the Fairmont Chicago Millennium Park, Penko, senior vice president of sales with American General Life, says that in the last few years there has been change that “none of us in our careers have had to face.”

He pointed to the fact that in 2010, 51% of earnings in this country came from wages — the lowest percentage since the government started keeping records in 1929, and 18% came from government entitlement programs, such as Social Security, the highest number since recordkeeping began. One in seven Americans is on food stamps, he adds, pointing out that tally includes his son, who is in the U.S. Army, and “our associates, co-workers and neighbors.”

The numbers will continue to change until it hits a tipping point, he believes. “Once [we] reach that tipping point, it’s gonna cascade at a rapid pace. Our obligation is to the find a safety net.”

That safety net means putting a focus on the employee and developing products that are designed for the American worker, “the average American worker, not the affluent but those who show up every day and try to earn a wage,” he says.

To model that himself, Penko says everything he does is about his employees, and that is the way the industry is moving. “The smart carriers are gonna differentiate themselves by putting focus on employer,” he says.

Brokers also need to focus more on “solutions over spreadsheeting,” he adds. “If all we are doing is spreadsheets … then we are missing the boat and not doing what is right for the client. …Be that trusted adviser.”

Yet, he cautions these “important” changes will not happen overnight. “There will be resistance,” he says. “We have to remain focused and determined because these challenges are not like anything we’ve faced in our careers. The numbers are the worst they’ve even been. We are going to have to change the dynamic.”

“Competitors will not be doing this; they will not make the effort to be creative,” he adds. “We have to have a sense of urgency in doing this because these problems are pronounced. We are close to a tipping point in this nation and in our world what we can do … we can make a difference.”

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