Spring 2009/ No. 79
Group Company Myopia
By Gil Lowerre
For years, we’ve detailed the disappearing (and now invisible) differences between the traditional worksite business and the group voluntary business. For most readers, the question is settled. The distinctions have vanished. For those that can’t see the forest, they risk doing themselves and their company significant damage. Unable to see beyond the trees, they develop strategies for the 1990’s, sideswiped by the competitors they refused to see. So, what are those trees?
We’re on a group platform; they’re on an individual platform.
Look again. Most of the traditional “worksite” companies now offer group platform products, some transitioning completely to group while others offering a mixed platform portfolio. And hybrid products (individual-like products filed on a group chassis) continue to gain market share. You can’t identify a competitor by its filing platform.
We enroll in group meetings; they do one-on-ones.
Not true. We now have individual companies offering group meetings, web and call center enrollments, and we have group companies promoting one-on-one enrollments as their base system. You can’t identify a competitor by its enrollment process.
We use employee benefit brokers; they don’t.
Very wrong. Employee benefit brokers are key targets for all traditional players and when asked with which voluntary carrier they place their business, the largest benefit brokers name a traditional individual platform carrier as two of the three they use most often. You can’t identify a competitor by its broker population.
We sell large cases; they sell small cases.
Aflac competes for the largest cases in the market, and several micro-market leaders are group companies. You can’t identify a competitor by its case size.
Just when we think this issue has been put to bed, it seems that a new cadre of group executives enters the voluntary business. And some fall into the same old trap. Group company executives need to understand that the absence of the distinctions discussed above means that all voluntary/worksite companies now compete side by side, for the same accounts and the same brokers. What matters is whether the company is competing for the same consumer dollars that you are.
Executives coming into the business from the group side need to focus on today’s real competitors, not the traditional companies they wrestled with for their employer-paid benefit business. This is a different world and those who can’t take off their blinders and see the pitfalls are likely to run themselves and their company into one.
To learn how Eastbridge can help your company’s voluntary program, contact one of our consultants today.
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