How to Get into Groups...

[jmarkk1]

I know there are a lot of you guys that talk about cold calling and even stopping in to businesses, but have any of you had any success actually networking with employees that can get the door open for you to come in and help out with the benefits?

Cold calling and other methods are ok to use, but when I talk to employees of companies that I'd like to work with, the thing I hear from the majority of them is that their benefits really stink. (not just employees bashing their coverage, but serious problems) I've cold called these businesses, etc., and so far they have no intention of changing anything.

A couple of questions I have in regards to group benefits: (keep in mind I'm not totally new to this segment of the market, but I'm not as seasoned as some of you veterans)

1. Why do businesses choose to work with their broker? (especially when the benefits package really does stink)

2. Why would a business owner not want to get a few different quotes and possibly work with a new broker?....saving money and providing better coverage seems like a win-win.

So...thoughts on working with employees to get door open vs. cold calling?

 

[leevena]

Be prepared for 100+ responses because this is a wide-open question, and there are many valid responses.

To begin with, you will very rarely find employees who are "satisfied" with their current coverage. A typical comment heard during an enrollment with a new carrier goes something along the lines of "why do we have to change from our current carrier, we like that plan". Yet, a few years earlier when they went to that new plan, they bashed it.

As to intentions to change/cold calling, for a variety of reasons employers think in terms of 12 months, so if it off anniversary, you may be wasting your time. This is especially true if the employer is using some kind of alternative risk funding.

Why do they work with their current broker...who knows? Could be a friend, relative, laziness on part of the employer to find something else, the broker brought the cheapest thing, the broker solved their problems, etc, etc.

My suggestion to you would be to do something different than what the majority of the brokers do now. By this I mean they tend to shop the business for a lower cost, and do a few enrollment meetings.

 

[jmarkk1]

The comment about employees not being satisfied that I made has nothing to do with your typical bashing that goes on when copays go up $5, etc.

I know the coverage that employees have and when renewal comes up, the changes are so drastic and often times don't make any sense. For example, going from a $500 deductible plan where employer pays 100% (including spouse and dependents) and then goes to a $5000 deductibe where employer pays 75% of employee and nothing towards spouse and dependents. Granted, I understand that costs needed to be saved, etc., but this is worse than just ripping off the band-aid all at once.

Also, I know that when I call groups, they have are being called 2 to 3 times a week, and I'm just another call.

How do you get around this? other prospecting methods?

 

[ABC]

First off most employees have little say in the employee benefits for the company. So going this route could get you in the door but my experience has been the contact will not even return my call dropping the employees name.

The information you are getting from a employee might not be the true picture. If a group makes those kind of changes then something is going on. Large rate increase on fully insured.

When you are calling on groups you have to realize these owner/decision makers are seasoned. They have seen this movie before. The current broker should be able to quote the entire market. 90% of groups are happy with the current broker.

I am going to be brutally honest with you. Being a Rookie you are going to have to go after business no one else wants. These will be SIC codes that seasoned brokers stay a way from. You are also going to have to service the group at a much higher level than what they would receive from another agent.

I don't know what size groups you are going after but I would look at groups under 10 lives.

 

[PepDaddy]

Group is a tough competitive market, you will find that most busines owners employee benefit packages rank right up there with getting a root canal, it's a necassary evil. Even if you have a carrier that offers a great rate, in certain geo tarket areas around your State.

9 times out of 10 your prospect can take your quote to their current agent and have then underwrite for them.

What I found that works best with group, and thats all I sell. Is going in with Workers Compensation, more than half business owners don't understand it, and don't know the liability that comes without having it. Business owners understand risk and liability and how we live in a ver legalistic society. One accident can bankrupt a small business.

There are riches in the niches in insurance, rather than be a me too agent, you have to position yourself as being different, and informative. It's great that employees dislike thier benefit package, but the one that signs the checks makes all the decisions.

I would rather dominate a vertical market CPA, Realtors, Manufacturers and so on, than struggle to gain a large market. Recently I started targeting schools, too soon to tell if I can be successful, but through a large Professional Employer Org. we established a consortium, with a leveraged buying pool, that can reduce a schools cost by 25 to 45% with a like benefit package. There is a lot of hurdles to jump with the establishment of the consortium, but there is only two organizations currently that are dominating schools, we saw smaller school districts leaving union contract organizations to self fund, and try drastic measures, was an opportunity for us to move in.

The consortium allows us to circumvent bid process, and gives us access to schools, and avoid being listed as an insurance vendor, or other vendor services, because consortiums are not designated as vendors.

So my advice, is try some different measures, and be out of the box, look at trends that are happening, that no one is capitalizing on. I beleive you will make some great head way. May not be an over-nighter, but with some strategic planning, and sticktuiveness it's possible.

 

[williadd]

Group is a tough competitive market, you will find that most busines owners employee benefit packages rank right up there with getting a root canal, it's a necassary evil. Even if you have a carrier that offers a great rate, in certain geo tarket areas around your State.

9 times out of 10 your prospect can take your quote to their current agent and have then underwrite for them.

What I found that works best with group, and thats all I sell. Is going in with Workers Compensation, more than half business owners don't understand it, and don't know the liability that comes without having it. Business owners understand risk and liability and how we live in a ver legalistic society. One accident can bankrupt a small business.



There are riches in the niches in insurance, rather than be a me too agent, you have to position yourself as being different, and informative. It's great that employees dislike thier benefit package, but the one that signs the checks makes all the decisions.

I would rather dominate a vertical market CPA, Realtors, Manufacturers and so on, than struggle to gain a large market. Recently I started targeting schools, too soon to tell if I can be successful, but through a large Professional Employer Org. we established a consortium, with a leveraged buying pool, that can reduce a schools cost by 25 to 45% with a like benefit package. There is a lot of hurdles to jump with the establishment of the consortium, but there is only two organizations currently that are dominating schools, we saw smaller school districts leaving union contract organizations to self fund, and try drastic measures, was an opportunity for us to move in.

The consortium allows us to circumvent bid process, and gives us access to schools, and avoid being listed as an insurance vendor, or other vendor services, because consortiums are not designated as vendors.

So my advice, is try some different measures, and be out of the box, look at trends that are happening, that no one is capitalizing on. I beleive you will make some great head way. May not be an over-nighter, but with some strategic planning, and sticktuiveness it's possible.

what state r u in? here in jersey, most public schools are part of the state plan which doesnt pay broker fees. i have a decent niche with charter schools, but what ive found to be the best marketing is personal relationships.

i network with a lot of decision makers and i have made most of them a lot of money when the market was right. that and getting a decent book of business my barrier to entry was a lot easier than most. then again, im an engineer 6 sigma trained so thinking outside the box is actually the box for me...

btw, this is Harry, not williadd (long story)

 

[jmarkk1]

First off most employees have little say in the employee benefits for the company. So going this route could get you in the door but my experience has been the contact will not even return my call dropping the employees name.

The information you are getting from a employee might not be the true picture. If a group makes those kind of changes then something is going on. Large rate increase on fully insured.

When you are calling on groups you have to realize these owner/decision makers are seasoned. They have seen this movie before. The current broker should be able to quote the entire market. 90% of groups are happy with the current broker.

I am going to be brutally honest with you. Being a Rookie you are going to have to go after business no one else wants. These will be SIC codes that seasoned brokers stay a way from. You are also going to have to service the group at a much higher level than what they would receive from another agent.

I don't know what size groups you are going after but I would look at groups under 10 lives.

I'm mainly wanting to work with groups under 30 employees. In our area, the businesses that "fit" this criteria are under serviced and a good deal of them do not have broker.

I've read your statistic about 90% of employers being happy with current broker, and I find this hard to believe when it comes to smaller groups. I would agree that 90% of employers aren't open to finding or looking into some better options.

All I'm looking for is advice on what's needed to get their attention...either through a call or a walk-in.

 

[leevena]

Why don't you try self-funding for these groups. Good chance that this will be something different from what the employers have seen in the past.

 

[PepDaddy]

what state r u in? here in jersey, most public schools are part of the state plan which doesnt pay broker fees. i have a decent niche with charter schools, but what ive found to be the best marketing is personal relationships.

i network with a lot of decision makers and i have made most of them a lot of money when the market was right. that and getting a decent book of business my barrier to entry was a lot easier than most. then again, im an engineer 6 sigma trained so thinking outside the box is actually the box for me...

btw, this is Harry, not williadd (long story)

I'm in the greate State of Michigan, schools environments here is very volitale to say the least, school closing in a district one a week.

I've found that working with Professional Employer Organizations are the best in cracking larger accounts, one reason that schools do not contract with insurance carriers, or insurance agencies large or small, is they lack the back end support to handle a large group like schools.

If you look at the organization in your state that offers employee benefits to schools, they act as a Third Party Administrator in most cases will also be fee oriented and offer cadillac plans like blue cross blue shield, or the incumbent carrier in your state.

schools are arrogant when it comes to employee benefit packages, they want the top plans, but now that times are getting tight, tax base shrinking, student population shrinking, they know they have to do something, but not sure how to accomplish it.

We still have an uphill battle with schools here in our state, but I beleive I'm on the right track, we currently have 15 school districts that have opted in for our consortium. The consortium will allow for pooling collective buying power, the more schools join the better rates we can achieve.

You have to know how schools operate, not your typical buying processes. Some have bargaining committees, some are bid oriented, some require a percentage of voting and numerous hierarchy to climb.

My advice if you want to tackle schools in your state would be to build a case, here in Michigan in 2007 schools are required to get 4 competitive bids, so I got on the bid list, just so i was able to get the census and premium rate information, I then built a case and went to several PEO's until I found the one, that shared the vision, and went from there.

So there is a little work involved, but my commission revenue from each school district, could potentially bring about 3,000 to 7,000 per school, they are averaging about 150,000 to 300,000 per month in premium and thats just medical, not dental no workers comp. You can see the income potential.

My hope is to help schools be more solid secure the futures for teachers, and provide a stellar education for the students. If I can achieve this and make a decent living, I felt I have arrived.

Let me know if you have questions, I be happy to see if I can help.

 

[ABC]

I don't agree with trying to self fund these size cases.

I also don't see the value of advising someone to new to jump in and try to do a political group like a school system.

I would say you are right in chasing the groups under 30 lives.
The 15-20 life market is ripe for the taking. These groups are getting low service from large agency because they are small. If you are independent these will add up to six figures quickly.

You have to be able to sell yourself and your abilities to represent the clients best interests.

I have had a handful of good sales people from other industries that could not sell that idea.