Health carrier view of brokers must change
The most difficult and challenging role in any benefit agency today is new client acquisition. Finding and engaging the right clients takes research, knowledge, persistence, organization, a challenger’s mentality and a tremendous belief in the agency's ability to provide the right guidance, advice and solutions for the client.
I fear that for too long some health insurance companies have seen the brokers role as less than this.
Some markets have tried to control advisers and brokers by granting them a low rate to "be able to get the business." What the client should realize is the first year low rate comes at a price: An obligation on the part of the broker to "sell the high rate renewal" to allow the carrier who provided the first year discount to make up the lost profit.
If a market has a track record of buying business and selling on first year rate it doesn't serve the client well. The best brokers make recommendations based on good knowledge and the best long-term interests of their clients.
I have witnessed carriers threaten to remove licensed broker partners if they can't sell an unreasonably high renewal rate. These carriers engage in these behaviors with the very best of brokers. Instead of such action, I propose two ways insurance companies can change their relationship with advisers for the better.
Message to health insurance carriers
First, decide what caliber of agent/producer you want to have representing your brand and select them based on their dedication to the industry, credentials and designations, integrity, activity, productivity, doing their job well, representing your product accurately, ability to innovate and commitment to keep up with changes in the industry.
Then, focus on offering the best value and product to clients and forget about selling on a low ball first year price. Get it right from the start by having lower expenses, better product offerings, more accurate underwriting and build a sound foundation and value experience for the client and their employees.
For the carriers who figure this out and execute best, the market is theirs for the taking.
Lots of things are changing in our market and the way the health carriers view the role of their broker partners must as well. Health insurance companies need to be able to win by having the right combination of value and price and seek out broker partners who are not just looking for the lowest rate first year to win the business.
And if the broker focuses on meeting the client’s needs, understand that is a good thing and dig deep to understand what those needs are.
In the end, the cream rises to the top. This is true for the client regarding the employees they attract and retain, the carrier's success in building market share and the broker's ability to deliver the best guidance and advice to their clients.
Clients desire to create long-term stability and a quality benefits program. A fair product at a fair price for many years will endear the right client to the right insurance provider. And the right client will return the favor by showing loyalty in a tough year if the rate increase request is reasonable.