Benefits small business expansion?  5 questions to ask and 7 must-haves

Blog_Small Biz Expansion_LinkedIn

Are you a benefits insurer planning to move down market? How will you win in the small case, small business market? Here are 5 questions to ask yourself and a checklist of 7 capabilities that you will very likely find you need.

Increased expectations open opportunity

Small business employers and employees are an underserved market. The majority of employees in small businesses are not buying voluntary benefits. Why? Because 36 percent of their employers do not offer any voluntary benefits. But, when they are offered, the take rate is high. However, in step with all consumers, they also have growing expectations for greater personalization of their buying and servicing experience.

Agile insurers see the market as a window of opportunity for new business models and practices that could rapidly shift market leadership.

5 questions to ask yourself:

  1. What is different about today’s down market opportunity?
  2. Will your products be a good fit for the market?
  3. Can you find the distribution you need?  
  4. Can your underwriting adapt to a new market?
  5. Will you meet your new customers’ expectations?

Checklist:  7 capabilities you may need to move down market 

  1. Offer product from core to voluntary that adjust to the needs of each demographic – You will need to bundle the right products and plans for each market segment with the limits and values preset and offer a simple enrolment and servicing experience.
  2. Gain producer shelf-space with pre-packaged bundles, quick quote, and turn-key support – Small case brokers have a shelf space typically limited to 1-3 voluntary carriers. To win that shelf-space, you will need to support the higher volumes of business that small case brokers need with turn-key solutions.
  3. Retain producers with simple and transparent enrollment, administration and billing operations – Small case producers may focus more on ease-of-doing-business, such as the carrier’s ability to administer and bill, to avoid future problems that may impact the client relationship. They are also much more likely to use carrier supplied enrollment services.
  4. Deliver off-the-shelf products and rates easily understood by occasional producers and employees – There is no time for the manual underwriting and the custom pricing typical of large case business.
  5. Provide straight-thru-processing and automated micro-pricing capabilities You will need to micro-price competitively for different geographies and industries with different risk characteristics and provide off-the-shelf products and off-the-shelf rates.
  6. Compete on price while delivering ease of administration to employers – Time- and resource-strapped small employers value ease-of-doing business as much as they want a good price. You will need to be responsible for record-keeping on voluntary plans; allow employees to manage claims and enrolment digitally; provide an accurate and timely list bill.
  7. Deliver digital self-service to meet expectations and share workload – Brokers and employees want greater personalization of their experience; digital, self-service capabilities for shopping, payment,
    policy and billing changes and claims; and easy plan member change. In turn, self-service capabilities reduce the administrative burden of the insurer.

For more information and strategies about downmarket expansion, download a copy of the eBook "Essentials of Gaining Small Case Market Share." Tony Grosso is vice president of Product and Industry Marketing at EIS Group and can be reached at agrosso@eisgroup.com.