August 15, 2018
By: Scott Brown

Market disruption makes service an imperative

In the face of market disruption, health insurers need to raise their profile with small-to-medium-sized businesses (2-500 employees), who constitute two-thirds of revenue in the private-sector employer market. A surefire way to do that is giving better service to brokers, especially to those with high growth prospects.

At the moment, the big challenge to carriers is disruption in many forms. Newly-minted association health plans (AHPs) could draw millions away from existing plans. Level-funded products continue to pull off smaller businesses as they move down market. Millennials will constitute nearly half our workforce in the next few years, bringing with them different expectations regarding speed of service and technology applications.

Some carriers still see brokers as business nuisances rather than necessities. In a previous blog post, I explained how brokers are an unavoidable market reality that help smart carriers build business.

This makes brokers critical. There are three specific ways brokers help carriers: reducing churn, pushing back against commoditization and providing a stable customer base.

Accenture recently surveyed some 1,000 brokers and verified service matters—a lot. Not just sales service, either, but client service, too.

Brokers identified specific service needs. They want access to client data. They want proper enrollment tools. They want ease of business. One prominent expectation: “Help me resolve my issues.” Brokers want to know issues they refer to carriers will be resolved correctly and fast.

Right now, 62 percent of broker time is spent on implementation and ongoing account service-related functions. That’s time spent not selling, a fact brokers know well. This is especially true for a subset we call “hyper-growth brokers,” those experiencing over 20 percent growth in client numbers.

Hyper-growth brokers place 13 percent higher expectations on carrier capabilities, including service. They handle more of their clients’ brokerage needs, with 51 percent of them supplying all benefits to clients (versus 31 percent with other brokers).

Perhaps most important, hyper-growth brokers cross-sell more (e.g., 42 percent sell retirement packages to clients). This makes them especially attractive as a source of business. But you should know these same brokers are more likely to shop for client value.

Health plans that cater to hyper-growth brokers will benefit in turn from those brokers’ greater expectations. Consider offering incentives beyond the financial, including differentiated service reward packages like the loyalty programs offered by hotel chains and airlines. But most importantly, offer the kind of service brokers both value and expect.

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