Group insurance brokers should be selling more voluntary benefits. It's not that voluntary benefit sales are not increasing. It's that the average group broker still thinks about a potential voluntary benefit sale the same way as a group sale. This does not lead to the best results.
One of the hardest parts of the employee benefit business (or any sales business) is cutting through the competition and getting a customer to do business with you for the first time. Once you have a relationship and are making your customers happy, they should put more business with you. Often what happens, however, is that a customer will put their voluntary business with a different broker or consultant because of the way these benefits were positioned. That is why almost half of new voluntary sales are initiated by someone other than the incumbent benefit broker.
Why does this happen? There is not just one answer, but there are several key points that group brokers should pay attention to if they want to sell more and have more voluntary benefit sales.
How to sell more voluntary
People are busy. The benefits department is busy, account managers are busy, and brokers and consultants who drive the relationship are busy. This is especially true during renewal periods and open enrollment, when there is generally more work than the rest of the year. Moving a voluntary benefit initiative away from open enrollments can create some additional bandwidth for a proper rollout of voluntary benefits.
Group enrollment is much different than individual benefits communication and enrollment. A group-style enrollment can work, but unless there is extra commitment from the employer and extra focus on pre-communication (payroll stuffers, posters, announcement letters), often the results are much less than expected and even disappointing. The enrollment conditions make or break an enrollment and are often more important than the product mix.
Employer buy-in and support is vital. Assuming that the customer is always right is generally true. However, it has been proven time and time again that individual one-on-one enrollment meetings with properly trained benefit counselors yield much better participation than traditional group-level meetings. Individual employee meetings have the positive effect of employees understanding what's at risk and learning about solutions to cover that risk. If an employee is asked to spend their hard-earned money, it is vital that they appreciate and understand risks and how insurance products can work for their individual needs. Benefits of many voluntary benefit plans include guarantee issue products, ease of payroll deduction, the simple buying process, and more.
Using the insurance carrier for enrollment may not be the optimal solution either. A group enrollment may yield 15% participation, while a properly structured individual enrollment can yield closer to 50-60% participation. Many insurance carriers have started to offer enrollment services for voluntary benefits. Results have been mixed at best, for a variety of reasons. These include lack of specialization, a one carrier solution and limited resources. Often, engaging a third-party enrollment and communications firm can be a big step up from carrier enrollment. It's all about focus and results.
There is no one silver bullet that will work in every case. In general, however, if group brokers focused on some of the above issues they would be much more successful. Brokers would increase their voluntary benefit sales and their clients would not turn elsewhere for this portion of their benefit business.
Toth has been in the employee benefits business for more than 20 years and is managing director of
