If P&C brokers are to succeed in the employee benefits space, both sides of the business need to fully understand the similarities and differences between them, a P&C group benefits advisor has warned.
“There’s huge benefit in commercial brokers and employee benefits advisors collaborating more, even seeing the client together,” said Steve Hesketh, managing partner, group benefits & pension division with CapriCMW Insurance, a member of the Canadian Broker Network.
In his 20 years with CapriCMW, and as supplier to the benefits industry in a previous role, Hesketh has witnessed more failures than successes of commercial brokers entering the employee benefits space.
Early on, he recognized the opportunity that’s led more and more P&C brokerages to acquire benefits firms.
“Clients, commercial brokers and benefits advisors realized the key opportunity of a warm referral from a trusted source. More clients want to see consolidation of services, whilst more P&C firms recognize the success of cross-referrals and leveraging the same decision-maker at client-level,” Hesketh said.
He added, “In order to be successful, I realized I needed to learn more about commercial insurance … and educate my commercial partners on the key similarities and differences in our sales processes and offerings. And if we didn’t understand the differences from each other’s perspectives, we were going to frustrate one another.”
In some ways, commercial and benefits insurance can be like oil and water, Hesketh said.
“Initially we gravitate to being in the insurance industry, but when you get down to it, the vocabulary differs, the insurers are not the same and P&C truly manages risk whereas benefits is more a predictable experience,” he said.
Path to success
Whereas benefits advisors should do more to get to know the client’s business, culture and history, commercial brokers need to understand that employees are a tough group to serve.
“Success looks a lot different on the benefits side,” Hesketh said. “We have both an employer and employee group to satisfy. As such, things move a lot slower. For example, the commercial side doesn’t need to consult employees to switch insurers. On our side, it’s a critical step that can delay the process and requires a whole different skillset than in the boardroom.”
It’s all about managing expectations.
“One has to pay attention to these differences and have honest conversations with commercial and benefits partners in order to collaborate successfully,” he said, and added working together doesn’t just pave the way to successfully attracting new cross-referral business.
“Having another set of eyes and ears on the client helps each other stay on top of retention. That’s a great benefit – my commercial partners have my back and vice versa,” Hesketh said. “Of course, there are no guarantees, but your chances of retaining a client are much greater if you addressed both their commercial and benefits needs.”