NU 'Agency Of The Year' Winners See Big Payoff From Employee Benefit Sales

The agency offers group benefits, defined pension plans, voluntary products and advanced estate planning services, which together contributes 28 percent of JSL's revenue stream, Mr. Ivey noted.

Meanwhile, he added, "these [benefits] areas do not have the same downside price or rate volatility or soft market pricing, therefore they are a positive revenue contributor year in and year out."

By combining commercial p-c products with benefits sales, according to Mr. Ivey, "we see higher retention percentages… We can offer more of a complete solution to clients with benefits."

Those agencies that shy away from benefits sales, or add on such product offerings half-heartedly, risk losing their commercial accounts to better equipped competitors, Mr. Ivey warned.

"I can tell you that if an agency with p-c capabilities comes to your account and writes their benefits, they're going after the property-casualty, too," he said.

J. Smith Lanier agents "tandem-sell," he noted. "We'll send in a p-c and benefits producer, and once we're in the room with the buyer, we show them we have more products and services to offer. We're going to find where buyers have some pain–most often their group health plan these days–where we can supply an answer."

If a p-c agency sells benefits to existing or new clients, "your overall revenue per customer goes up," noted Mr. Ivey, who said such account-rounding is "huge for us. It's cultural for us. There's an exception when we don't cross-sell."

Ray Bouchard, president of Bouchard Insurance in Clearwater, Fla.–one of two agency winners to receive an Honorable Mention in this year's award program–said during the roundtable that 26 percent of his firm's revenue is derived from benefit sales.

That percentage is increasing, he noted, "and not just because it takes up more of our book in the soft [p-c] market. We are in fact writing a lot more benefits for business clients."

One way to secure benefits sales is to offer value-added services, much as NU's award winners provide risk management support well beyond mere insurance purchasing to acquire and maintain their p-c books of business. Mr. Bouchard cited HR consultation services as one key wedge in acquiring new benefits accounts.

"Our benefits department goes in to help the client educate their employees on what these plans mean to them, and how the new consumer-directed health plans can benefit the client and the employees," he said.

Banking on the expectation that "we really think the benefits business is going to become more and more of a profit center for the agency," Mr. Bouchard said that to expand the agency's benefits capabilities, "we have invested quite a bit of time in recruiting and developing talent. In fact, we've hired more benefits producers in the last five years than p-c producers, so we see this as a very good opportunity moving forward."

Benefits sales is nothing new for the other agency winner to earn an Honorable Mention this year–Lassiter-Ware Insurance in Leesburg, Fla., where benefits accounts for 28 percent of revenue.

"We've offered benefit products for over 20 years," according to the firm's president, Ted Ostrander Jr. "I can't imagine an agency today not having a benefits arm."

During the NU roundtable, Mr. Ostrander noted that "unlike p-c agencies, which are contracted with a certain number of p-c carriers, benefits producers have access to all benefits carriers." As a result, he added, since "anybody can get a quote from any carrier, it's all about what services your agency can bring to the table."

Having to compete for benefits sales "based on what skill set and services" an agency offers is the same approach Mr. Ostrander expects his p-c producers to follow, he noted, because Lassiter-Ware wants its agents to be full-service risk managers, not price-based policy peddlers.

"Culture-wise, that's a big plus, and one of the reasons I think every agency should sell benefits," said Mr. Ostrander. "Watching benefit sales in action is a great way for our property-casualty people to see how to sell yourself, and how to sell the services you provide. That's been one of those side benefits that we didn't realize when we first got into benefits."