You are now well into February, and if you have been doing any marketing at all, you know that the first quarter of 2014 poses a brand new challenge. If you do not know what I am talking about, you probably do not market your business at all. To understand the challenge that I am referring to, answer this question: What percentage of your clients chose an early renewal in December as a way to avoid the rate increases associated with implementation of the Affordable Care Act? Most agents tell me that approximately 70% or more of their groups chose to renew early. That choice has very real implications for your ability to grow your business in the first half of 2014.
All of those businesses that chose to renew early will be extremely reticent to shop their group medical during the first six months of 2014. Not only will they not want to look at their group medical, but those two or three accidental renewals that you used to count on are unlikely to appear. An additional complication is the fact that over the last decade many companies moved to a Jan. 1 or a June 30 renewal. This means that not only are all of the groups that renewed in December off the table, but also all of the Jan. 1 renewals are off the table as well. The remaining 20% to 30% of the market is all that remains viable from a group medical point of view. Of course, you can prospect and secure renewal dates and permission to quote at renewal, but the real question becomes: How many new December prospects can you work on while still providing a meaningful renewal experience to existing clients?
If you want to grow your book of business you will only have two options. You can elect to hire additional staff and turn over a significant portion of your renewal business to them. The problem with this approach is that it significantly cuts into your already thin margins. Alternatively, you can develop a marketing approach that is based on something other than the group medical, such as executive disability income. From my perspective, developing an alternative marketing approach is the only choice if you want a business that remains viable over the longer-term.
While some of the participants in my LinkedIn Lead System program are primarily group health agents, many others are focused on marketing either voluntary benefits or the LegalShield (I am not a representative) programs. Marketers in both of these programs are opening more new groups than ever before. Equally important is the fact that both of these marketing niches require significantly less service work, which actually makes them much more profitable. If you are promoting yourself as an employee benefit professional, you are uniquely positioned to go after this market, since both voluntary insurance products and the
LegalShield products can be an integral component of a comprehensive employee benefit package. The value to the smart group health agent is that you can open a lot of new accounts, generate new revenue and have a built-in competitive advantage when the medical is up for renewal.
If you want to not only survive but also want to thrive in this new world, you will have to evolve and redesign your approach to the market. Agents prospecting based on health reform will soon begin to see diminishing returns as the public gets more comfortable. The early adopters of new approaches will reap the biggest dividends.
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