Spring 2009/ No. 79
Are We in the Voluntary Business or the Benefits Business?
Companies that have been selling employer-paid benefits have historically developed their strategies around traditional lines: the medical business, the non-medical business, or simply the benefits business. Voluntary was an awkward addition.
It’s similar to, but not quite the same as the traditional business of these carriers. Up until 10 years ago, many of these companies lumped voluntary into their core strategy. And many wondered why their results were so disappointing. Today, almost all companies realize that voluntary is different and requires a distinct strategy. That shift has paralleled the explosion of group company sales and their growing importance on an industry level.
But core and voluntary strategies need to be tightly connected, even if they are different. And it doesn’t matter whether they are two documents, two efforts, or one. The key is that they recognize the uniqueness as well as the similarities inherent in the two businesses. This is an issue of substance, not form. While different companies may have more or less separation between their core and voluntary strategies, all need to integrate three key differences into their thinking.
The competition is different.
The people you compete against in your core lines are not the only ones you compete against in your voluntary business. See the article in this issue, Group Company Myopia, for more on this topic.
The products are different.
Voluntary products are not one-offs from employer-paid group products. They are different in design, features, choices, pricing, and underwriting.
The processes are different.
Issue, billing, enrollment, and even service and conservation are unique in the voluntary world.
Other aspects may or may not be different, but losing sight of these basic distinctions signals that you don’t understand the voluntary business and its subtle but vital differences.
For more information on strategies that work in the voluntary market, talk to one of our Eastbridge consultants at (860) 676-9633.
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