Speed vs. Innovation
Carriers entering
the voluntary market face a conundrum. On the one hand, it is
common for new entrants to try to quickly offer a package of products
and services that match their chosen distribution strategy. For
example, a carrier pursuing a sub-segment of the Employee Benefit
Broker channel would probably try to enter with a term product,
maybe STD and dental, and maybe a pre-populated application process,
etc. But the more they try to match the market, the more the new
carrier becomes an undifferentiated competitor. The old saying,
“Why should that broker do business with you?” was
aimed at this situation. If you’re basically the same as
everyone else, why should the broker switch? You’re just
a riskier version of what they have now.
On the other hand, being innovative, by matching different offerings with the channel served or inventing entirely new offerings, brings its own difficulties. Long term, the benefits of a truly differentiated offering, if it meets the needs of the market, are undeniable. But the first risk is that the match isn’t compelling, or it’s incorrect, or the brokers don’t recognize it. The second risk is that, even if the match is successful, it will take significant time to allow brokers to recognize the offering and become comfortable with it—and with you.
Do you want to get there quickly with an undifferentiated offering or have a unique offering that is unproven and will take far longer to become established? Should you go for speed or for innovation? Should you risk it all by playing it safe or risk it all by taking a flyer?
The correct answer, of course, is to balance both. You want an offering your target producers will recognize and feel comfortable about, while weaving in enough innovation to attract attention and encourage trial. The key is two-fold.
First, know how much to innovate. Different types of brokers are more or less conservative. Or said another way, different brokers will demand a basic, recognizable package of products and services. Mid-size Employee Benefit Brokers are conservative in their product selection and processes, while Classic Worksite Brokers are always looking for new products and services.
Second, know where to innovate. Again, mid-size Employee Benefit Brokers are famous for their reliance on four key voluntary products, so offering only other products may cause them to cross you off the list. But they are open to new enrollment possibilities. Specialist enrollment firms are interested in product and compensation alternatives, but enrollment methodologies won’t get positive attention.
The key for a carrier defining a new strategy, or entering the market for the first time, is balance. So seek a balance between speed and innovation. And in your innovative elements, match the channel you are targeting to the innovations you are creating.
For information on how we can help you develop or fine-tune your strategy, give us a call at (860) 676-9633 or email info@eastbridge.com.
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