Employers reveal why they choose their brokers—and why they’d leave them
by Dave O’Brien
Each year, Zywave sends a survey to employers asking what they are looking for in an insurance broker or consultant. What we have found has been immensely valuable for brokers in terms of helping them strategically plan to meet their clients’ needs and chart a course toward organic growth. This year we surveyed over 1,000 employers, representing a range of industries and sizes across the country. With every survey, we find interesting nuggets that represent the changing marketplace and evolving client demands, but we’ve also noticed a distinct trend over the past several years. Revealed through the numbers and percentages is a clear message: an alarming number of employers are not receiving from their brokers the very things they consider to be most important. There is a notable gap between what employers are demanding and what brokers are supplying.
Here are some key findings that illustrate the disparity: Some of the most important services clients want from a benefits broker are compliance updates and compliant plan documents (respectively, more than 65 percent and 75 percent of respondents want these services). It seems reasonable that the demand would be so high, considering respondents also told us that one of their top three employee benefits challenges was keeping in compliance and up to date on changing regulations and reporting requirements under the Affordable Care Act. However, there is a disconnect—despite employers’ clearly defined compliance-related needs, up to 40 percent of respondents told us that their brokers are not fulfilling them. Even more illuminating is the insight we gained when we asked employers what criteria they use when selecting a broker: 89 percent look for prompt and effective service in a timely manner (nearly 70 percent would leave a broker if this need is not met); 79 percent need regular communication (40 percent would change brokers if this is lacking); 79 percent are looking for a trusted advisor and 77 percent would select a broker if he or she has the ability to challenge or negotiate renewals. Like with anything else in the market, employers have a choice. They can and have exercised this choice if they feel someone else can do it better. In fact, at least 17 percent of employers have changed brokers over the past three years.
The Demand Outweighs The Supply: Herein Lies A Broker’s Opportunity
Data isn’t powerful because of its mere informative nature. Rather, its muscle comes from its inherent capability for useful application. The significance behind all the facts and figures within Zywave’s 2015 Broker Services Survey lies in how a broker can apply the intelligence—how the information can provide direction for change, revision and optimization of current practices, in order to drive meaningful results for his or her business.
The primary takeaway for brokers is that the disparity between the current employer demand and the current broker supply creates opportunity. By filling this gap, brokers can compete (even with large competitors), increase the value of their businesses and grow and retain their books of business. Some changes might never be possible—like competing on price with technology giants. Other changes, however, are not only possible, but actually quite painless. Employers are asking for things like more communication, legislative and compliance information, claims reports, timely delivery of materials and benefits election assistance—all reasonable demands that are feasible for a broker to meet.
I’ll close by sharing what I think is the most telling piece of information we received regarding the amount of opportunity that exists for brokers today. One out of every 4 employers told us that he or she wants to hear from his or her broker at least weekly; combine that with the more than 40 percent of employers that told us they want to hear from their brokers at least monthly, and what you have is an overwhelming majority of clients and prospects that rely on and seek out advice from brokers. Brokers are not only needed, they are wanted and valued more than ever. If there was ever a time to apply intelligence and take advantage of an optimistic outlook, it would be now.