Avon, CT, USA (May 24, 2005) – By the year 2020, change will have overwhelmed the traditional approaches of carriers in the benefits business. We’ll see more niche manufacturers (carriers) that sell a single product line (or a few closely related products) rather than a broad range of products. We’ll also see fewer vertically aligned manufacturers (those that manufacture a complete portfolio of products, administer the products on their legacy system, provide service for all customer groups, and distribute through their own network of reps and brokers) as each segment has found they must compete externally with other entities as well as internally for available resources. And we’ll notice less multi-line manufacturers as they find they can no longer afford to subsidize less successful product lines with their “featured” line or risk the competitiveness of these top lines.
“In the 2020 model, which is described in detail in our latest white paper, The Future for Insurance Companies in the Benefits Arena – A 2020 Supplement, successful carriers will either allow strategic units to have complete competitive latitude or the carrier will jump to the front of the change curve and develop an entirely new model,” says Gil Lowerre, president, Eastbridge Consulting Group, Inc. Vertically aligned carriers can only succeed if each “area” (product, distribution, administration, etc.) is given more competitive latitude or independence from the other areas and is able to compete without being constrained by what the other areas in the company may need or want them to provide. “This,” adds Lowerre, “is extremely difficult for carriers (or any business) to achieve as there is always the tendency to look for ‘synergies’ from within.”
The second pathway to success will be for carriers to create a brand new business model that leverages the changes taking place in the benefits environment (as described in Eastbridge’s original paper, 2020: A Clearer Vision of the Future), thereby jumping to the front of the change curves, as niche manufacturers have done in the 2020 model. “We realize that it’s difficult for carriers to embrace change,” adds Bonnie Brazzell, Eastbridge vice president. “But it’s more difficult to give up on the historical approaches that were appropriate to a different era.”
The goal of both reports is to encourage readers to develop concrete opinions about the future of the benefits industry based on Eastbridge’s predictions and to take the appropriate steps to prepare for the future they envision.
Those who previously purchased the original report, 2020: A Clearer Vision of the Future, and Eastbridge’s Insight customers will receive a free copy of the supplement report, The Future for Insurance Companies in the Benefits Arena—A 2020 Supplement. Both the original report and supplement are being offered to new buyers as a package for just $750.
Eastbridge Consulting Group, Inc., is a marketing advisory firm serving insurance and financial services organizations in the United States and Canada. www.eastbridge.com.