Your distribution engine powers sales, but the fuel you need for each market segment differs. The capabilities you need to support voluntary sales by brokers in the small case market versus those focused on the large case market vary greatly. So the question for insurers planning a down market move is: will you find the distribution you need?
A tale of two brokers
The small case market is characterized by captive agents, occasional producers, and small employee benefits brokers. They need more flow to compensate for the lower average total premium of a sale as compared to large case brokers. Ease of doing business with carrier partners enabled by a high level of automation is critical to their success.
Keep it super simple
Small case producers are drawn to carriers who keep their business operations simple and transparent. As examples, they will use a limited number of carriers per account as opposed to a customized, best-of-breed approach a large case broker might take.
They 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,* rather than tailoring a multi-faceted solution for the employer that might include individual and group meetings, online webinars for education, web-enabled enrollment and a call center.
Getting shelf space
The bottom line is that small case brokers require scale and look for turn-key solutions with a heavy focus on price while also expecting a carrier to take on more responsibilities.* This is a challenge for carriers whose focus has historically been large cases. They may not have the supporting turn-key capabilities of pre-packaged bundles, educational materials, quick quote and enrollment services. Carriers lacking these automated capabilities may find small case brokers unwilling to add them to a shelf space typically limited to 1-3 voluntary carriers.
Key business capabilities
Insurers aiming at the small case market need these capabilities:
- Broker and employer self-service features for shopping and data gathering
- Ability to provide multiple quotes for comparison
- Automated case setup, including enrollment portals
- Support for multiple lines of business from one insurer
Central enabling technologies
Key supporting technologies for small case business are:
- Integrated broker, employer and enrollment portals
- Flexible billing that supports modern modality, list billing, and direct deposit
- Flexible commission tools to handle level, heaped, and hybrid commissions at a product level
- Flexible product and plan design tools to setup and deploy pre-packaged offerings
- Configurable workflow and rules engine for fully automated quoting and exception handling
- Self-service via digital channels for brokers, employers, and employees
In an industry sector dominated by legacy systems built for a large case market, the majority of carriers simply lack the straight-thru-processing and automation to support the small case brokers. But, with the voluntary market growing at a rate around seven percent annually, the opportunity to grow down market is calling all large case carriers that can adapt.
For more information, download a copy of the new 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 email@example.com. This article was first published by ITA Pro magazine.
*Celent – The Changing Technology Landscape of Group/Voluntary, October 2016