The new ‘challenge’ of selling voluntary products
The number of new brokers selling voluntary insurance is slowing down. As a result, those advisers who entered the field in recent years are gaining experience, they are becoming more sophisticated, practicing offensive selling and are able to put pressure on carriers, a noted expert on voluntary benefits said Tuesday at EBA’s Workplace Benefits Mania in Las Vegas.
After 15 years of growth, the number of brokers selling voluntary has stopped rising, with nearly 95% of all employee benefit brokers selling voluntary today, said Gil Lowerre, president of Eastbridge Consulting Group.
Thinking of the industry over time, as new brokers came in, voluntary was getting less sophisticated on average because of so many “newbies,” Lowerre said. However, that stopped four or five years ago.
“Everyone selling voluntary for the next couple of years is … selling it today,” he said. “That means the broker population will go the opposite direction in terms of sophistication. More experience each year, more cases that they deal with, place greater demands on carriers.”
“This is a fundamental issue for everyone that serves the industry,” he added. A mediocre offering is no longer a choice. “Those days are gone. The bar has been raised,” he explained.
Broker learning curve
As brokers become more sophisticated in voluntary benefits, there is growing pressure on those who sell the products because the learning curve is evening out, Lowerre said.
The first step on the learning curve is when brokers first began to selling voluntary. They had limited knowledge of the products and were selling defensively as employers asked for the products, Lowerre said. “[A] defensive kind of selling was the norm among new employee benefit brokers coming into the business and is no more,” he explained.
As they became more comfortable in selling, brokers started to become offensive — 76% of brokers describing themselves as offensive in the latest Eastbridge study — by using voluntary as a way to sell new cases and help employers. “This is a major step, a notable change and a major move,” Lowerre said.
The bottom line is there is much more competition. In an Eastbridge survey, 38% of brokers who only sell voluntary said competition was at ‘high’ or ‘somewhat high’ levels today, while 18% of employee benefit brokers said the same. Just 1% of benefit brokers and 0% of voluntary brokers said there was no competition.
While there is “no question opportunity is out there, there is also no question there are some barriers and obstacles in terms of increased competition and challenges to in-force business on our knowledge and skills,” Lowerre said.
“We [have] to do some stuff if we want to take advantage of that opportunity,” he added. “We wish you to grab that opportunity, but plan business, plan for clients and plan for your own self development.”