Fall 2008 / No. 77
They Don’t Know Any Better—Yet
While the overwhelming majority of traditional employee benefit brokers now offer voluntary benefits, many sell only defensively and often with the carrier that provides their employer-paid products. For many of these producers, following the path of least resistance makes sense. Unsophisticated when it comes to the voluntary marketplace, many of these brokers are unaware that the services and processes offered are far below market standards.
Unfortunately, these “low hanging fruit” sales can lure a carrier into a false complacency, believing that sub-market standards are sustainable. But already, the evidence is mounting that this shortsighted approach has its limits. First, many of these companies are experiencing poor results as they try to branch out beyond this core. Brokers, who sell their employer-paid coverages but not their voluntary benefits, are reluctant to switch from their other worksite carriers to the core company. Sales reps report that these efforts are making little headway as these more experienced brokers value the superior processes and service offered elsewhere. And even greater frustration is reported in attracting non-aligned brokers who are more sophisticated and sell voluntary regularly with other carriers.
While the harvest may seem good today, inferior back room and enrollment operations exact a price. The sales growth will first plateau, and then erode if these companies do not improve their models and approach market standards. And the longer they wait, the longer it will take them to overcome a reputation for substandard support.
For more information on enrollment and administrative market requirements, contact Eastbridge at 860-676-9633.
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