These tough economic times present a great opportunity for property-casualty agents and brokers to expand their businesses to new heights by combining a new strategy and an old tactic–cross-selling employee benefit products to their existing small-business customers.

Individuals who once turned to their house for an equity infusion in times of a medical emergency now find that the financial cushion they once had is gone with the complete meltdown of mortgage and home values.

Gone are the days when the investment in one's home could provide an influx of cash in times of medical emergency. Gone are the days for these individuals when it was commonplace for them to simply dip into the savings account to pay for an unexpected root canal.

These issues grow exponentially for the small-business owner squeezed between tight credit markets and diminished opportunity for commercial loans.

The new economic reality makes employee benefits an attractive growth area for p-c agents and brokers. While p-c insurance coverage has become table stakes for virtually every company, the U.S. Department of Labor's Bureau of Labor Statistics reports that less than half of all full-time employees participate in disability or dental insurance benefits.

Coupled with the fact that the demand for non-medical insurance benefits is at an all-time high, as linkages between specialized health (such as oral health) and general health continue to come to light, there is a natural avenue for brokers to build and strengthen their existing relationships with companies.

That important reality opens the door to a new market for brokers, one of the most important untapped growth areas–small businesses. Small businesses fuel our economy. Yet, penetration rates show that the small-case market–which includes retail and blue-collar workers, for example–is a wide open opportunity for p-c brokers as very few insurance providers serve the specialized needs of this market.

Often, a broker must wear two hats when serving a small business–one as a seller and one as an advisor. In fact, first-time buyers in particular are significantly influenced by their brokers' opinions when determining what benefits to buy and when.

Brokers have the opportunity to coach small businesses on how to find the right plans for their company, thus cementing their role as trusted advisor and potentially ensuring a substantial revenue stream for years to come.

Brokers and employers regularly report the vast majority of all employee benefit costs are for medical insurance, leaving only a small percentage to cover the gamut of non-medical insurance benefits–which include life, dental and disability.

If you decide to add employee benefits to your portfolio, there are two keys for success–sell voluntary benefit plans, and ensure that value-added services accompany product offerings.

Small-business clients need options to meet the needs of their employees that are also affordable.

One option is voluntary employee benefits that allow employers to offer expanded benefit plans and control costs at the same time.

For p-c insurance agents and brokers, the pitch to cross-sell voluntary benefits into a company can often be easier for employers to swallow. All benefits are paid directly by the employee, and the only cost for the employer is administrative time. Employees get the added benefit of expanded coverage options, and by signing up as a group, take advantage of favorable group rates.

Each year, more and more employers do not have the resources to offer a diverse portfolio of employee benefits. In fact, in 2007, voluntary insurance new sales topped $5 billion in the United States, according to the latest report by the Eastbridge Consulting Group in Avon, Conn.

As this trend continues, it is expected that voluntary benefit plans will experience the same meteoric rise and popularity that pensions did when they went from defined benefit plans to defined contribution plans in the 1990s.

When marketing these products, p-c agents and brokers need to realize that value-added services are no longer added–they're expected–and this is just as true when it comes to employee benefits.

Customers demand that their agents and brokers offer a vast array of extra products and services–preferably at no cost–simply to help them differentiate one firm from the next.

Consider a disability product where online financial counseling services are included. Employers, especially small employers, cannot afford to provide access to financial counseling.

While some employees are expected to become disabled at some time in their career, many times more are expected to use financial counseling services. Brokers must design efficient product plans that will leverage value-added services to help retain and grow existing client relationships.

A pressing question for p-c agents and brokers is how to choose a potential partner in a buyer's market. Only a handful of insurance providers can offer a diverse and well-received portfolio of insurance products across the varied employee benefit product lines discussed above.

For a broker, three main elements must be present to evaluate and select a potential employee benefit provider. The provider:

o Must be a responsive partner who can and will anticipate your business needs. Choose a partner who is committed to understanding how you want to work together. Make sure the provider has deep market knowledge, existing long-term partnerships, are accessible when you need them most and understand how to help you drive revenue growth.

o Must be equipped with flexible and customized service, technology and tools. Identify companies that offer customized solutions designed to help you achieve your goals. Many insurance providers try to provide flexible and customized service, but their existing infrastructure and processes make it nearly impossible to deliver on that promise.

o Must have processes in place to make it simple and easier to do business. Make sure that your requirements are being met, rather than you fitting theirs. Eliminate the hassles out of the insurance process by selling products that are simple and help make it easy for companies to do business with you.

Take advantage of carriers with technology systems which have improved the efficiency of back-office functions such as group enrollment and billing via online processes.

For the retail broker to be successful in this hyper-competitive insurance environment, where too many brokers are selling eerily similar products and promises, the individual insurance brokers will have to differentiate themselves by the retail sale. Already serving as the trusted advisor, the opportunity now exists to further leverage this advantage.

Agents and brokers need to evaluate whether it makes strategic sense to add employee benefits to the insurance portfolio, and if it does, take the necessary steps to identify a suitable partner.

If it all works out in the end, customers will be able to offer more comprehensive benefit programs to their employees, which can help attract and retain top talent. The insurance broker, in turn, will have another opportunity to boost their revenue stream.

Special Reports /

Tough Financial Times Fuel Opportunity For Benefit Sales To Small-Business Firms

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