AVON, CONNECTICUT, USA (April 22, 2004)�There are signs in the marketplace that the traditional group, worksite, and even pension distribution channels are “blending” into a new breed of broker�the Benefits Advisor. These new distributors are more independent and offer a wide array of both protection and asset accumulation/management products to their clients. Several recently completed Eastbridge broker surveys reinforce this trend. Consider these findings:
- Ninety percent or more of employee benefits brokers now sell at least some voluntary products.
- Six in ten worksite brokers sell traditional group products.
- Six in ten worksite and eight in ten employee benefits brokers also sell individual life and health products.
- Six in ten employee benefits and two in ten worksite brokers also sell pension products.
So what is driving these brokers to cross business lines? According to Gil Lowerre, president of Eastbridge, there are several factors.
“First, competition in the industry is intense. Brokers have recognized that to protect themselves from competition, they must become more than just a supplier to their employer clients. To solidify their position, they must build an ongoing relationship with the client and become a trusted advisor,” say Lowerre. The more lines of business that a broker offers, the more value they can create for their clients. “Over half of the respondents in a recent Eastbridge survey describe their business offering as a ‘total benefits solution,'” adds Lowerre.
One way of offering more products is to partner with other brokers or producers who are specialists in other business lines. In fact, over half of the brokers in the same Eastbridge study said that they partner with other brokers to offer their clients more solutions. In this type of arrangement, the broker with the client relationship becomes the “relationship manager” and assists the client in choosing other partners who can provide a broader solution.
“This evolution of brokers is going to be very important to carriers,” claims Lowerre. “Carriers that don’t keep up with the changes may lose distribution.” In other words, the strategy that works well today, may not work at all in two years. For example, as employee benefits brokers change and grow more comfortable with voluntary, the support they look for from carriers will also change. Carriers need to recognize that they may need to market their company to segments of producers other than their core producers�because it may be another broker (who is partnering with a core producer) that is making the decision on what carrier to use.
Bottom line? Make sure you keep your strategy up to date and stay on top of the changes occurring within distribution channels! The market is changing quickly and so are the needs and wants of broker segments.
Eastbridge Consulting Group, Inc. is a marketing advisory firm serving insurance and financial services organizations in the United States and Canada.
For more information visit www.eastbridge.com