GAs Don’t Mince Words
Compiled by Thora Madden
In this month’s questionnaire, a few of our favorite general agencies open up about the state of the industry and what lies ahead…
Cal Broker: Have GAs Changed Over the Past Few Years? If so, how?
Jennifer Lisanti, director of sales, Beere & Purves:
GAs are a direct extension of brokers, so just as brokers have been pushed to know more and do more over the past several years, so have GAs. GAs now offer brokers assistance and solutions beyond their traditional services. For example, GAs provide online enrollment support and assistance with compliance and regulatory issues. I would also add that although GAs have always provided ongoing service throughout the year for brokers’ clients, the demand for this support has increased. Rules are stricter with carriers due to ACA, etc., and small groups often struggle through the complexity of employee benefits. Clients need help understanding the processes and help fixing errors.
Robert C. Love, president, benefits division at BenefitMall:
Yes, the GA business has been evolving tremendously within the past few years. We are now seeing an increased need for:
- Technology and data integration
- Service levels and responsiveness
GAs continue to develop integrated sales solutions for customers, brokers, carriers, employers and employees. Connectivity and speed of processing new business has grown significantly.
Kristine Pertrosyan, vice president, sales, Dickerson Insurance Services:
I would say, just like the broker’s role has changed within the past few years, GAs have had to implement resources that brokers and their clients need. Most of this has been due to the advances in technology or technology-driven broker channels like the Zenefits of the world.
GAs are looking to support the product and support diversification that brokers need in their books of business. We are also utilizing compliance tools for employers as the fines and penalties of the ACA are coming into play. GAs serve as an even stronger conduit between carriers and agents as all three segments strive to operate as efficiently as possible.
Kevin Timone, senior vice president of sales, LISI:
Different GAs have evolved, to varying degrees, with the changing market. GAs used to provide mainly front-end support for sales, marketing and quoting. But they are now also servicing the back end with the day-to-day administration of in-force business. Today’s GAs need to offer a wider scope of services, faster turn-around, and technology that cuts brokers’ costs while increasing their efficiency. There is also a greater focus on providing marketing, cross selling, and account management services. At LISI, we’ve distinguished ourselves with technology that delivers better administrative support and more efficiency from onboarding to in-force business. What that means is that our brokers are seeing considerably faster turn-around times when selling and renewing their books of business. LISI offers real-time connectivity with Anthem Blue Cross. Once a group is approved, they get Member ID numbers in real time. It’s been extremely popular with brokers throughout the state. We’re also committed to offering comprehensive EaseCentral support for brokers of all sizes. Dash is our newest initiative, which allows brokers to submit cases online and track them every step of the way.
Technology only goes so far. Brokers also need to help clients make sense of the complexity that comes with the ACA. LISI continues to enhance broker education and intelligence on plans, networks and rating positions in the state. That level of support gives our brokers the ability to communicate those changes effectively.
GAs also need to help brokers become more sophisticated with marketing. The Digital Marketing Program, available exclusively to LISI brokers, offers a major advantage in the marketplace. LISI offers a dynamic team of copywriters, designers and strategists who come from big brands. Our team helps brokers assess the effectiveness of their website and suggest ways to improve its performance, boosting the success of their agency. LISI provides marketing gurus on call.
David L. Fear, Sr. RHU, president/CEO, Shepler & Fear General Agency:
Yes, General Agencies have changed as the market has changed – much the same way that employee benefit producers have had to change too. As agents found that they had to offer more value to their clients, the same is true of General Agencies. Today’s General Agent not only has a variety of new products and services to offer the agent, but GAs have taken a much more active role in educating and training producers and their staff on contemporary issues such as employee benefit compliance, government affairs and risk management. I also think that GAs – as product aggregators – have taken a more active role in carrier relationships. Providing carrier quotes and enrollment assistance will still be a major part of what GAs provide to agents, but we’re seeing some GAs move into more of a consultative role with their agent customers: Consultative in areas such regulatory compliance, human resource and employee benefit administration.
Jessica Word, president, Word & Brown General Agency:
The Affordable Care Act has dramatically changed the health insurance marketplace for both brokers and General Agents. To serve the requirements of producers today, it is critical GAs offer a broad range of services to help agents and agencies better address the diverse needs of their clients. We have always emphasized service as part of our value proposition, but we have expanded our services to go beyond guaranteed quoting and enrollment assistance. We deliver more online training than ever before and compliance support from a team of in-house experts – something not available elsewhere. Our Account Management team gives brokers a single point of contact for searches and requests as well as answers to questions on virtually anything – group changes, compliance, administrative issues and more. We help brokers quickly find what they are looking for, freeing them up to focus their time on prospecting and sales.
Cal Broker: What Are the Most Important Market Trends That Agents Need To be Aware of This Year in Small or Large Group?
Lisanti, Beere & Purves:
The good news brokers is that it appears we are going into the third year of very flat renewals in the small group market. This will help brokers retain their block and give them time to prospect and add additional lines of coverage to their existing groups. The insurance industry moves slowly, so bridging the gap with today’s faster paced world and the preferences of younger employees can be a challenge. It is still a relationship business and clients need assistance with our
complex industry, but they are looking for convenience, efficiencies and compliance help. Brokers need to continue to adjust their services and work styles to meet these newer demands.
Currently, medical renewals have softened a bit, causing employers to be more persistent with their selected carrier. We’re seeing employers consistently stay with the same carrier year after year. While this is good news, it is also opens a window where brokers can introduce new technology, or improve current technology, that an employer is utilizing to administer their benefit programs. Employers can use online tools to manage benefits and employee profiles, new hire and open enrollment capabilities, contribution amount management, in-depth reporting tools and supplemental benefits. GAs have a significant opportunity to be the all-in-one technology solution for brokers and employers.
Pertrosyan, Dickerson Insurance Services:
Even though rate increases have stabilized in the last couple of years, employers are still carrying the burden of high premiums. It’s important for brokers to consider other types of policies or plans that can supplement the standard fully insured plan.
Compliance is the shadow I see hanging over the industry. Now with California stepping out boldly with their own agenda, agents will have to maneuver and advise with directives that are compliant with ACA directives and California initiatives as they are implemented. Brokers also need to think outside the traditional carrier ‘box.’ What other viable options are there to help their clients achieve or maintain benefit affordability while maintaining compliance?
There is a stable market with smaller rate increases throughout California, so agents need to work harder for sales and hunt aggressively. With increased competition for talent, more virgin groups are seeking insurance. Also, larger employers want a wider range of coverage to attract top talent. LISI offers the largest product portfolio of health plans and ancillary benefits. With CoPower’s packaged benefits, employers have a turnkey way to boost their benefit package. Another trend is that larger employers are adopting HRIS platforms. At LISI, we have the tools to connect with those platforms. In order to advise employers, brokers need to understand trends like the Aetna/CVS merger as well as greater transparency in hospital and pharmacy costs. Our Intel department arms brokers with the insights and analysis to consult with their clients effectively.
Fear, Shepler & Fear:
In the small group market, I see continued stability when compared to the individual market. While most of the press reports focus on continued challenges in the individual market, what they tend to leave out of their reporting is that the small group market has stabilized and there are more players in this market than in the recent past. The trends I see in the small group market are: Continued movement to narrower provider network products in order to keep premium rates lower; continued erosion of PPO products toward more HMO/EPO (i.e. – no out of network benefits); more movement to high deductible plans that are wrapped with HRA/HSA/FSA programs.
In the large group market, I see continued movement to alternative funding including self-funding, level-funding and HDHP/HRA programs. In that regard I also see greater movement toward the use of Third Party Administration (TPA) services as opposed to carrier provided Administrative Services Only (ASO) programs. I see a continuation of large employers moving to Reference Based Pricing away from traditional PPO or UCR programs for their non-HMO offerings. And finally, I see large employers continuing to demand better service and pricing of that service from their TPA/ASO vendors.
Word, Word & Brown:
Technology is increasingly important to brokers and their clients, whether they’re small or large Groups. A tool that is very popular with our brokers is an app that gives members in some of our partner carriers’ health plans instant access on their smartphones to their Medical ID Card information. Technology that integrates online enrollment with benefits management is also gaining traction. It used to be that only larger employers could afford integrated HR, benefits and payroll tools; however, much more cost-effective solutions are now available to both large and smaller businesses. Brokers can offer an all-in-one program to their clients that brings together hiring, onboarding, benefits enrollment, employee records, time management, compliance, payroll and more. It is important that benefits professionals stay on top of new technology, which can help them build stronger relationships with their clients and ensure continued retention.
Cal Broker: What kinds of GA Services Are Most Vital To Today’s Agents and What Should Agents Keep in Mind when Choosing a GA?
Lisanti, Beere & Purves:
The regulatory complexity of our industry, and the increasing demands of clients, mean that it is imperative that brokers work with GAs that are knowledgeable and responsive. A GA needs to make the process as quick and smooth as possible so that the broker can provide high levels of satisfaction to today’s demanding clients. Having a GA partner allows brokers to save time, sell more, better service their clients, and become more profitable by offloading the work on GAs. When I started in the industry, GAs were strictly a marketing distribution channel for carriers, but now GAs are full service extensions of a broker’s office.
The most important GA services are those that make the life of the broker and the employer easier. Whether it is technology, daily service needs, or just a hands-on blue collar work ethic, a GA that is focused on making a broker and employer more productive and efficient each day will succeed. A GA that provides and specializes in tools and technology that provide the customer with a simplified process and ease of administration will also succeed. Agents are seeking a true partner in this line of business and that partner must offer multiple sales and service solutions, above and beyond standard medical.
Pertrosyan, Dickerson Insurance Services:
Organizational and representative knowledge. Technology opportunities and support for the agents. Educational opportunities and collaborative support for the agents.
A GA who treats every broker with the same enthusiasm and support. Even though technology support is vital in today’s environment, the GA role is also to support the broker from the beginning – running the initial proposal all the way through the installation and servicing of the client.
The trend is for more brokers to work through general agencies instead of going it alone. Responsiveness, accuracy and market knowledge are key. Brokers need a full suite of services related to compliance and technology and, in some cases, payroll. The good GAs will leverage online enrollment and API/EDI connections. The areas that brokers value the most are LISI’s responsiveness, accuracy and market knowledge. Since LISI has the largest product portfolio, there is very little that we can’t support or assist with from regional to state-wide carriers. Brokers also value our real-time technology, case installment, open-enrollment support, and year-round administrative support for all size groups. We take great pride in the tenure of our regional sales managers. When people think of LISI, experience comes to mind. LISI continues to be at the forefront of API and EDI connections with various partners. We continue to leverage technology to manage books of business with internal and external efficiencies. When brokers are looking for a GA to choose from, they should research whether the GA has opted to be backed by private equity and venture capital versus those that have remained locally owned and operated with long-term investments. Brokers need general agencies that are investing in the future, not the short term. LISI has a huge focus on onboarding new brokers, educating them, and becoming a partner in their success. We’ve played a big role in helping grow new agencies and agencies that have been purchased. LISI remains true to quality, not quantity in sales support throughout California. We compete on service and integrity. May the best GA win!
Fear, Shepler & Fear:
The general expectation is that the average GA will continue to provide basic quote and enrollment assistance for the broker. That is just a starting point as GAs are now featuring many other value-added services and innovative new products that were not on the radar 10 years ago. For example, small group GAs are now expected to assist agents in the placement of individual coverage as smaller employers drop group coverage and elect to implement QSEHRA’s for their employees. Another example is the need to be able to assist brokers in renewals so that their clients know that their agent is shopping out their coverage and assisting in evaluation plan usage and design so that the right cost/benefit ratio is achieved.
The enactment of health care reform at both the Federal and State level means that brokers need assistance in explaining the law to their clients and a GA can be a key partner in that regard. The expectation is that a GA should be as expert in a carrier’s product as much as the carrier themselves. They must have an in-depth knowledge of those products and services that they are representing. Will the GA do more than just assist in the sales presentation and enrollment of the account? What sort of additional consultative services are available from the GA? And finally, how much “backroom” service will the GA provide to the independent benefit producer?
Word, Word & Brown:
For brokers, it is important to look for a partner who can help you not only find and write the business, but keep it. A General Agent staffed by the right people – with the right attitude and the right tools – is critical to a broker’s long-term success. A broad portfolio, training and education, innovative sales and marketing tools, cutting-edge technology, and local support are essential. An experienced, multi-faceted sales team committed to helping you – online, on the phone, and in-person – makes a huge difference. If you are an agent comparing GAs – either because you’re new to the market and industry or because you’re unhappy with your current partner – it is important to get to know the people with whom you will be working. Is the broker support team staffed with newbies, or does the team have lengthy tenure? Does the GA stand behind its quotes? Are their rates guaranteed-accurate? Does the GA have an underwriting team committed to 24-hour turnaround? Do they have the carrier relationships to help you be successful? Do they offer the support you need to avoid administrative work and focus on sales? Those kinds of things really matter, and they’re more important today than ever before.
Special thanks to:
Jennifer Lisanti, Beere & Purves
Robert C. Love, BenefitMall
Kristine Pertrosyan, Dickerson Insurance Services
Kevin Timone, LISI
David L. Fear, Sr., Shepler & Fear General Agency
Jessica Word, Word and Brown