August 31, 2015 by Canadian Underwriter
A survey of more than 1,000 employers south of the border shows a gap between what they want and what insurance brokers or consultants are providing has emerged as a distinct trend, reports Zywave, Inc.
The divide relates to, among other things, what employers are looking for to become more educated insurance buyers and to obtain a better handle on, notes a statement Friday from Zywave, a provider of software-as-a-service (SaaS) technology solutions for the insurance industry.
In Zywave’s 2015 Broker Services Survey, employers representing a range of industries and sizes across the country were asked what services they want from their brokers, the challenges they face in the marketplace and what criteria impacts their decisions to work with or leave a broker.
Among other things, more than nine in 10 polled employers – 95% – respond that they want their brokers to help them become educated insurance buyers, but 67% say they feel their brokers are partially or fully keeping them in the dark.
Again, almost nine in 10 surveyed employers – 89% – say they want their brokers to provide plan design benchmarks during the renewal process, but more than half report their brokers are failing to do so.
“With every survey, we find interesting nuggets that represent the changing marketplace and evolving client demands, but we’ve also noticed a distinct trend over the past several years,” Zywave CEO Dave O’Brien says in the statement.
“Revealed through the numbers and percentages is a clear message: an alarming number of employers are not receiving from their brokers the very things they consider to be most important. There is a notable gap between what employers are demanding and what brokers are supplying,” O’Brien writes in a post on the company website.
Other survey findings include the following:
• 94% of employers say they want their brokers to consistently provide regulatory and legislative updates, but 72% say their brokers are not doing a satisfactory job (in the 2014 edition of the survey, 92% reported they wanted these updates, yet 53% of employers were not satisfied with their current broker in providing these updates);
• 94% of employers report they want their brokers to provide them with a total cost of risk analysis, but half say their brokers have not provided this vital information; and
• more positively, 98% of employers note they want their brokers to offer compliance-related webinars and 82% say their brokers are doing so.
Over the past three years, O’Brien writes in the post, survey findings show at least 17% of polled employers have changed brokers. Asked about the criteria used to select a broker, he notes that polled employers mentioned the following:
• 89% say they are looking for prompt and effective service in a timely manner (almost 70% would leave a broker if this need is not met);
• 79% need regular communication (40% would change brokers if this is lacking);
• 79% are looking for a trusted advisor; and
• 77% would select a broker if he or she has the ability to challenge or negotiate renewals.
O’Brien suggests in the statement, however, that the disparity between current employer demand and current broker supply creates opportunity. “By filling this gap, brokers can compete (even with large competitors), increase the value of their business, and grow and retain their book of business,” he argues.
“Some changes might never be possible – like competing on price with technology giants. Other changes, however, are not only possible, but actually quite painless,” O’Brien writes, citing such things as employers’ desire for more communication, legislative and compliance information and claims reports.
In the survey, employers were asked to rank their Top 3 risk management and employee benefits challenges. With regard to the former, Zywave reports these include controlling workers’ compensation costs, keeping up to date on regulatory changes and managing risk at multiple locations. (This compares to the 2014 findings of keeping up to date on regulatory changes, controlling workers’ compensation costs, and educating employees on safety.)
The company points out that the results highlight “additional opportunities for brokers to support their current clients. Brokers can also focus on these areas of importance to win new business.”
Brokers need to apply data’s intelligence – “how the information can provide direction for change, revision and optimization of current practices, in order to drive meaningful results for his or her business,” O’Brien writes.
This may be advanced by more frequently being in contact with employers. O’Brien writes that one of every four polled employers say he or she wants to hear from his or her broker at least weekly, and more than 40% say they want to hear from their brokers at least monthly.
“Brokers are not only needed, they are wanted and valued more than ever. If there was ever a time to apply intelligence and take advantage of an optimistic outlook, it would be now,” he maintains.