The new benefits landscape demands a whole new sales strategy
by John ThorntonMr. Thornton is Executive Vice President, Sales & Marketing, Amalgamated Life Insurance Company, a leading provider of comprehensive insurance solutions. Visit www.amalgamatedbenefits.com
Even before the pandemic, voluntary benefit sales were increasing at a steady pace. BenefitsPro’s U.S. Voluntary/Worksite Sales Report showed that new business annualized premium for voluntary sales increased in 2019 to $8.832 billion; a 4.5% increase over 2018 sales. The COVID-19 pandemic served to further drive interest and sales in voluntary products as more individuals began to appreciate its role in filling critical insurance gaps and provide financial protection.
Today, voluntary products are top of mind for more employees, employers, brokers, agents and carriers. Insurance professionals are seeing the potential for greater sales across all markets, from large organizations to the small and middle-market. They are recognizing that capturing sales in this growing, lucrative market demands a heightened focus and well-developed plan that reflects strategies in step with today’s market conditions.
The Voluntary Landscape
Oliver Wyman research found that more and more insurance advisors, as well as one in three small- to mid-market employers, were now including voluntary products as an integrated component of their benefits approach. Employers are viewing them as part of a gap plan strategy to cover medical expenses linked to their core medical offerings or by embedding them with other products. There also has been a greater reliance on advisors by employers/plan sponsors both to provide a wide array of voluntary solutions, as well as to address the need for improved employee education regarding these products and their roles. For insurance professionals who step up to this role, increased sales and growth have followed. Those that fail to adapt to the new voluntary landscape are more likely to see declining sales and loss of clients.
A 2015 Aflac Workforce Report included a study conducted by Research Now. It found that in 2015, 40% of brokers had been selling voluntary products for less than three years with 20% only having sold these products for less than one year. By 2018, over 57% of brokers were selling voluntary products according to a BenefitsPro/Eastbridge Voluntary with 35% of them reporting an increase in voluntary product revenues of up to 5%, and 18% reporting an increase of between 6% to 10%.
Growth in the voluntary market is also reflected in the broader range of ancillary products being marketed. From disability, critical illness, accidental death and dismemberment insurance products to hospital indemnity, dental, vision, legal, and identity protection, the diversity in products mirrors multi-generational workforces and employees with varying life stage needs. Effectively marketing and selling a broad portfolio of voluntary/ancillary products requires a more proactive, strategic approaches that responds to the needs of employers/plan sponsors and employees alike and leverages professional networks and resources.
Focus, Strategize and Collaborate
Insurance professionals, who are most successful in voluntary product sales, do not just sell these products as an add-on to their other product sales. The have developed a focused and strategic plan for voluntary sales. This plan encompasses specific marketing and sales elements. On the marketing side, there is a breakdown and schedule for activities such as email marketing campaigns, webinars, social media posts, advertising in select industry trade magazines and regional business publications, and digital marketing such as a dedicated section of their websites with voluntary product descriptions, educational videos and FAQs, as well as a mobile app that makes it easy to access this information anytime and anywhere.
On the sales side, there may be a dedicated business unit to sell voluntary products and/or a member of the senior executive team overseeing voluntary product sales – supervising sales representatives to ensure that they are utilizing all of the tools available to them. Sales representatives are armed with leads, current market research that can be shared with prospective customers to further educate and motivate them. There is ongoing benchmarking of voluntary sales to make sure that hot and warm leads are closed, and cool leads are further developed.
One strategy, that is often ignored, but which is especially effective in the marketing/sale of voluntary products is to understand the workforce demographics of prospects. This enables a broker to customize a sales strategy and focus on the voluntary products that best suit an organization’s specific workforce, whether it has a high percentage of Generation X-Z or Baby Boomers, or a mix of generations.
New Industry Partners
Another effective sales strategy is to partner with other industry members. For instance, partnering with carriers for product educational events or with benefit consultants serving in niche markets (e.g., specific industries; small, middle-market or large companies; unions; associations; nonprofits; etc.) has proven to generate positive results. In the same way that realtors might co-broker with others serving a specific market demographic or region, insurance professionals too can maximize their voluntary sales by teaming up, where deemed valuable, with others.
This partnering strategy can be especially useful for enrollment. By teaming up with a partner (e.g., a carrier or benefits consultant specializing in educating and communicating benefits to employees during enrollment events), a broker will not have to rely on a company’s human resources department to answer employee questions completely and/or effectively communicate a product’s importance in providing financial protection and supporting individuals’ well-being. These partners will be prepared to cite stark statistics that enlighten individuals as to the need for various voluntary benefits. For example, the fact that:
- Children ages 5 to 14 account for over 3 million emergency room visits (Source: Centers for Disease Control and Prevention),
- In 2020, there was an estimated 1.8 million new cancer cases diagnosed (Source: American Cancer Society),
- 2.5 million people are hospitalized each year due to an accident (Source: Centers for Disease Control and Prevention and the National Center for Injury Prevention and Control), and
- For individuals earning between $35,000 and $59,000, 69% reported a drastic or significant change in their financial situation due to a major illness and its depletion of their funds, and those at higher earning levels (i.e., $75,000 to $99,000) also felt the impact of a major illness on their finances. (Source: LIMRA).
Insurance professionals can be confident in knowing the enrollment team is fully-qualified to answer all questions and help position products for a sale. Some enrollment partners will also provide valuable support in designing an enrollment program that will best accommodate both the employer and employees in terms of schedule, agenda, and communications to employees leading up to the enrollment event.
A Strong Foundation
As with any initiative, to be successful, best practices need to be in place and followed diligently. To launch an effective voluntary sales plan, insurance professionals need to have a strong foundation in place. It requires:
- The right carrier(s) to provide access to a wide selection of cost-competitive voluntary benefits, marketing support in terms of product literature, mobile apps, and online resources, enrollment event support, as well as a strong claims payment and fiscal history as evidenced by A.M. Best “A” (Excellent) rating;
- Experienced enrollment partner with knowledgeable, personable representatives able to engage employees at worksite events, explain each product, answer their questions fully, and motivate a sale; and
- The hands-on involvement of a senior level executive in the brokerage/agency to oversee voluntary product sales, initiate new marketing/sales strategies, benchmark and analyze data relating to sales activities (i.e., inquiries, meetings, enrollment events, individual product sales, breakdown of customers to identify categories where sales are highest such as short-term disability, accident, critical illness and dental which were noted to be among the top five most frequently sold voluntary products in the Eastbridge 2020 Brokers and Voluntary Benefits – Growth in a Changing Market Spotlight™ Report.
There is little doubt that voluntary product sales will continue increasing. The question is which advisors will capture the most opportunities. By understanding today’s landscape, implementing sound marketing and sales strategies, as well as best practices, and aligning with the right partners, insurance advisors can develop a strong revenue stream from voluntary products. By bringing a wide selection of voluntary solutions to both existing customers and prospects, advisors can further strengthen these relationships, building greater loyalty and future sales.