In a fast changing world, the relevant question for any CEO is whether that business can be “Uber’ed” (I made that up) to the point that the core service is delivered in a more efficient and automated way. As a second generation business owner, it makes sense to consider whether past business models will be relevant for years to come. In hindsight to many industries, it would make sense to conclude that almost any business is ripe for more efficiency and automation.
As it relates to employee benefits, I have to think as objectively as possible and consider the possibilities:
- Employers, who have the time and resources, can become educated on how to properly design and monitor a benefits program.
- Assuming specs and data are accurate going in – websites could cooperate with multiple carriers to provide rate comparisons
- With a little coaching, employers could implement appropriate employee communication tools that would improve plan understanding, appreciation, and accountability
- Plans could be designed to provide employees with more self-serve flexibility and choice – with regard to choosing coverage and levels of protection
- Employers could decide to remove expensive plan design liabilities (unlimited drug maximums and open formulary) and simply offer healthcare spending accounts
- Brokers and benefits plan consultants could be removed and replaced with insurance company reps that are paid a flat salary
Yikes, I think I just forecasted my way out of business. Or have I?
At Thorpe Benefits, we have for years looked at the marketplace with significant optimism. In an industry ripe for needing better efficiency and creative alternatives, we also have brokers and consultants working in a sort of “pre-retirement mode”. No one wants to retire as a benefits broker – and why should they? Having built a block of business with recurring and somewhat stable revenue – why would you retire? You have open and friendly relationships with clients who rarely call you and for the most part still have pretty low expectations for services they need against a commission amount that is unknown and buried into the premiums they pay. Sweet business eh?
My belief is that businesses are getting smarter earlier on in their evolution. With growth and maturity – they take their business more seriously and start to demand more value for what they pay vendors and partners. As it relates to benefits consulting, I believe that organizations will want to see results and real value from their programs. They will begin to measure the real return on their premium and commission investments.
Companies will also want to invest wisely in health promotion and wellness programs. They don’t want a product pusher – they want real advice on how to build wellness programs that will return real value. I believe organizations will want to see proactive approaches to health and wellbeing and look to their consultant for clarity within a confusing array of vendors and empty promises.
So what does this mean to me and my industry? It means that for those companies that demand real value from their broker – it will be the services and effort of the consultant that will stand apart. No longer will the delivery of rates and renewals be the sole measurement. No longer will the measurement be based on how fast a call is returned – but more importantly how many unprompted/idea based calls you receive throughout the year.
We want clients who demand service and results from our company. Who want a specialized, team supported approach that delivers a real return on the invested commissions. The more demanding they are for service, the better that is for the relevancy of my business.
Give this question a final thought… Do I really need a benefits broker anymore?
If you answer is no, you might not be getting any real business value from this relationship and need to demand more. If you answer yes, than you need to continue to evaluate the services and support you receive for the commission you invest.
It won’t be long before our business is able to offer automated tools that replace some of what a broker can offer – but I will be enjoying the opportunity to deliver enhanced services and support to organizations that expect it and demand it.