Also in this issue:
Strategic Advantage, Part I
A Rose by Any Other Name
Strategic Advantage, Part II
The Small Case Market
Are You Tweeting Yet?
Let’s Buy a Voluntary Insurance Company
Don’t Go Through 2010 Blind
Enrollment Practices
Is the Worksite Business “Recession Proof”?
A Moving Target
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Winter 2010, No. 82
The Small Case Market
An increasing number of carriers are eyeing the under-fifty-life market with envy. It’s vast, under-penetrated, with relatively short sales cycles, little customization, and less competition. Sounds great.
The difficulty is finding producers who focus on that market. Two types dominate the space: the property and casualty producer and the small-case medical broker. Both have been difficult to attract to our business. Each is financially dependent on providing one key product line to a significant number of small cases, typically in a limited geographic area. Reputation, referrals, and high rates of repeat (continuing) business are vital to survival. The risks of adding a new, confusing and potentially dangerous line of business often outweigh the possible rewards.
Traditional voluntary carriers often treat these producers in the same way as their mainstream voluntary brokers, with bleak results. But there is renewed interest in this segment, and new carriers are bringing a new attitude to the challenge. Those new carriers include some traditional players, but the majority are the medical companies, seeking to piggyback on the relationships they already have with small-case medical brokers. There are several keys to working with these producers.
The first key is to recognize the unique perspective and concerns of these brokers. They have legitimate anxiety about voluntary coverages and their concerns must be addressed.
Second is to appreciate that these producers already have done the most difficult part of the job. They have built strong, trusted relationships with the people who make decisions about adding new benefits. For now, that’s enough. They will become more comfortable and confident with our products, but for the near future, we have to meet them where they are.
So the third key is to build processes and systems that take over the process from that point of introduction, and also provide a flow of reassurances and information during the process.
This third key means that, compared with other segments, the small case producer is probably more expensive to serve. And that means that we need to streamline, automate, and standardize our model to the degree possible. The remaining increased cost is spread over the far larger population of producers and cases. The potential rewards for carriers are tremendous.
For more information on the small case market, contact Eastbridge at 860-676-9633 or email info@eastbridge.com.
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