Have you heard?
Sales (and the function of the sales rep) is changing rapidly. If you’re reading this, the answer to my above question is very likely yes. This notion is widely accepted whether one is selling for a software company, industrial manufacturer or financial services institution.
Is the profession of insurance sales changing as rapidly as that of other industries?
This question is where differences in opinion may occur. My opinion? Yes. I’ll argue that no greater disruption has occurred (and will occur) to an industry’s selling model than in insurance, particularly employee benefits. The post-healthcare reform ecosystem and the introduction of exchanges has had undeniable impact on insurance distribution.
ZS has covered this topic extensively from many angles, but what about the impact to another influencer in the healthcare value chain: the insurance broker?
Insurance brokers act as independent advisors to employers. Employee benefits brokers help companies assess benefit needs, design plans, “shop” for carriers, and manage benefits providers. Insurance companies typically pay commissions when brokers sell (or renew) benefits plans for employers (such as medical, dental, life, etc.).
So how are local and regional brokers responding to the changes spurred by healthcare reform?
Commissions were reduced by health insurance companies, and many employer segments that they serve have dropped group health insurance, prompted by national subsidies to push their employees to the public markets.
Those who remain in the business are faced with a set of choices on how to respond. Below are the four most common responses we have observed, each with their own strengths and risks.
Broker Responses to the Changing Marketplace
One path isn’t necessarily preferred to the other. In fact, selecting only one path may not be enough for brokers with large books of business that have divergent customer needs and preferences. Those who can most efficiently access any of the above to match employer needs will stand to win mind and wallet share in the future marketplace.
As always, please contact us with your feedback or response on how this compares to what you are observing.