As a result of health-care reform, brokers and agents are faced with disruptive market dynamics, which, in turn, require a new way of thinking. Here are four trends that will influence the voluntary insurance market.
A new role
Many HR decision-makers and their employees will rely on brokers and agents to help navigate the growing complexity of health insurance. A recent Aflac survey found that nearly half of employees agreed with the statement: "Even though I believe health care reform is intended to give me greater control over my health care decisions, I don't believe I will have greater control because it is too complicated to understand." Another 34 percent said they will rely more heavily on their employer to educate them about health-care decisions as a result of health-care reform.
In voluntary insurance, the misconceptions among employees and employers create an opportunity for brokers and agents to provide even more education and guidance to HR executives. For instance, most companies (62 percent) mistakenly believe that payouts can only be used for specified medical expenses. Fewer than half agree that it does not directly cost the employer to make voluntary worksite insurance available, when, in fact, this is correct.
From disruption to innovation
To prosper in the new environment, agencies need to consider new business models, collaborative endeavors with other organizations and, in some cases, fraternizing with the competition.
For example, independent agencies and brokerage firms have been working with Aflac to add voluntary insurance expertise as an adjunct to their practices by "onboarding" Aflac agents into their organizations.
This lets them further diversify their products and be ready to meet the growing demand for voluntary insurance. While this type of collaboration does affect profit margins, the reality is that the revenue may not have existed in the first place. Another anticipated outcome is better-served clients who are more loyal to their agency partners.
Most agents and brokers agree that selling health insurance is grounded in establishing a personal relationship, but many debate whether technology can improve business processes and affect the sales and enrollment process.
As with any good marriage, the key is to reach a compromise. Many companies are seeking ways to leverage the efficiencies of technology while maintaining a personal connection. Aflac, for one, recently introduced an iPad application that will be available for download by agents and brokers. The application transforms a company's standard sales presentation into a customizable and interactive presentation on an iPad.
Consumers have not only grown accustomed to using their mobile smart phones for tasks like online banking and commerce, they now also expect such access. The reality is that consumer behavior and expectations, alongside pressure to conduct business more efficiently, contribute to the move toward web-based and mobile platforms. For health-insurance professionals, the challenge will be to produce solutions that enhance productivity, maintain personal interactions and promote excellent service delivery.
Benefits packages as the differentiator
With the establishment of minimum benefits standards and the option to move from employer plans to exchange plans, many companies are forecasting a grim outlook for traditional benefits packages. In fact, 42 percent of employers believe significantly diminished benefits packages for employees will be a likely outcome of health-care legislation. These factors will create an opportunity for companies to distinguish themselves by offering a more comprehensive benefits program.
In the Aflac study, 89 percent of employers believe that their overall benefits packages influence employee job satisfaction, and 86 percent believe they affect worker loyalty. A company's ability to demonstrate value to its workers by offering a benefits package unmatched by competitors will affect retention rates in the future. At the same time, HR professionals will be pressed to offer options to soften the impact of the inevitable cost-shifting and rising out-of-pocket expenses for their valuable workforce.
Making voluntary insurance policies available allows companies to enhance their benefits offerings, differentiate themselves from competitors and offer workers a choice in additional coverage.
These types of supplemental insurance policies and ancillary benefits will be a greater differentiator than ever in the battle to attract and protect a talented workforce.
Ron Agypt, a 34-year insurance industry veteran, is Aflac's vice president of Marketing Development and Broker Sales, U.S. For more information, visit aflacforbrokers.com, call 1-888-861-0251 or email firstname.lastname@example.org.