Insurance agents have traditionally focused on product and price, but today's business and HR teams need more. Is it time to re-assess your broker relationship?

Are You Getting the Most from Your Insurance Broker/Consultant Relationship?

Sep 27, 2016 3:00:00 AM

Today’s employers need improved results more than ever before. And the demands on HR/benefits have never been more complex. This puts employers in a difficult position having to navigate some very complicated circumstances.

Every business needs to control – at least to some degree – certain things related to their employees:

  • The cost of the benefit/insurance program
  • The time demands of service issues associated with the program
  • Clearly defined goals for the HR/benefit/insurance efforts
  • The ROI on that program
  • Their ability to attract/retain the best talent
  • The level of morale and employee engagement in the organization

Historically, insurance brokers have only focused on the first two items related to the cost and service of the benefits, but as the needs of employers change, so too should the services provided by your insurance consultant.  

See, your employee benefits consultant knows many aspects of your business intimately:

  • Who your employees and their families are and the needs they have as a group
  • The finances of your benefits program
  • The choices you made in selecting the plan design as it relates to the needs of your employees, the values of your organization, and the financial considerations taken into account
  • Benchmarking ideas of how you compare to others in your market

Because of all this knowledge, they should be the first ones offering ideas and advice on how to help you take control over many aspects of your employee management programs. And some do, but not all. What we’re seeing is insurance brokers falling into two very clear categories:

Brokers – or middlemen – are those who focus simply on the first two items – the product and the reactive service they can sell to a business who needs group benefits. You may recognize some of the sales pitches:

“We have great relationships with the carriers; let us give you a free insurance quote and see if we can beat your price.”

“Nobody provides better service than we do; we’ll be like an extension of your HR department.”

“Look at all of the ‘free stuff’ we’ll give you if you become a client.”

Consultants are those who recognize there is a much broader application and need for their knowledge and skills to help employers craft strategies for better alignment between HR and company goals. They are committed to ensuring their clients have the right insurance solutions at the right price, but they also understand that insurance is just one part of the answer they must bring to their clients.

Having access to all of the resources (insurance, communication, compliance, technology, wellbeing, etc.) is simply the ante into today’s game. Yet, they never show up with pre-determined answers around any of these items. They show up with a level of insatiable curiosity focused on uncovering what may be holding your organization back from reaching new heights.

What’s in a name?

These Broker and Consultant labels I’ve used here are purely for explanation purposes because you’ll find middlemen sellers calling themselves Consultants, and people who truly consult and advise and help craft strategy will still call themselves Brokers and Agents. Don’t be misled by the label you hear. Make your assessment based on the process and the focus of conversation presented to you.

If it’s all about product, carriers, price, and the final presentation and decision is dependent on a spreadsheet – they’re likely running their business as a distributor for the carrier products.

If it’s all about you, your HR and company goals, your employees, your strategy, their process to help you with those things, and a clear distinction between the insurance carrier and their own advising services, then they’re likely running their business as a true consultant or advisor and working on your behalf.

But follow all the way through the process and make sure it’s not just conversation. There must be an actual plan of the most important needs identified, in priority order, with implementation plans presented. If not, then the “consultation” may well just be empty promises.

Getting employers back to the strategy of their own business

Think about your current advisor. Which category do they fall in? Do you find that maybe it’s time to take a look at some other firms? If so, review their websites and LinkedIn profiles in detail. What are they saying? Are they talking about things that are important to YOU?

Select a couple of consultants to bring in for an interview during off-renewal times. Not only do you likely need that, but you deserve it as well.

Developing plan designs and negotiating with carriers will likely be something they are exceptionally good at (if not, they probably wouldn’t be in business), but developing a strategy to help you drive better overall business results should be the decision point. Ask yourself: Have they demonstrated an ability to deliver a better overall business plan or simply provided various plan options?

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