Making It Personal
The great thing about worksite marketing of voluntary benefits is having a captive audience of payroll members to whom you can market your products. The hard part has traditionally been that you have to go through the labor-intensive process of individually selling each member—and then handling all the paperwork, from application to administration to claims.
Automation of many steps has streamlined the process significantly, and Web-based approaches offer the possibility of substituting for face-to-face meetings altogether. But if insurance is sold rather than bought, it's hard to match the power of the personal touch. On the other hand, when it comes to large payroll accounts, maybe it's best to get personal in a digital way.
The importance of finding answers to this dilemma resides in the sheer scale of the worksite marketing opportunity. A 1999 study conducted by Avon-CT based Eastbridge Consulting Group estimated total new sales of voluntary benefits at approximately $2.6 billion. "The market is still very, very large," says Bonnie Brazzell, the firm's vice president for worksite marketing.
Since it's estimated that about 56 percent of employers already offer at least one voluntary benefit, there are 750,000 to one million businesses that aren't offering a single voluntary benefit, Brazzell says.
But a bigger opportunity may exist within the 56 percent that have opened the voluntary products door. "Just because an employer already offers one voluntary benefit does not mean that that particular market is saturated," Brazzell says. "We find that once an employer offers one voluntary benefit, they're also very open to offering additional benefits to their employees. There are still a lot of eligible employees very interested in purchasing; even if they own an existing product, many would like to own other voluntary benefits."
When it comes to tapping this opportunity, to a certain extent it's not a matter of technology making a conquest of traditional worksite marketing, but traditional worksite marketers using technology to extend their conquest. "You have to have the backroom technology in order to survive in this marketplace. Either you have to have it or you have to buy it. Tech has benefited companies such as AFLAC (see related article on page 45) and Colonial Life significantly," Brazzell says. "And when the industry moved from having to process paper applications to being able to electronically submit applications, you had major changes in cost structure."
The voluntary products market is mainly driven by personal sales, Brazzell says. However, "I see the capability of the Internet to replicate that agent value through a series of interactive questions."
FACE-TO-FACE POWER
Colonial Life (Columbia, SC, $1.1 billion in assets) continues to thrive through the face-to-face approach, and to develop its niche. However, 90 percent of new business is now submitted electronically, through a paperless process culminated by electronic signature capture using Topaz signature pads (Simi Valley, CA), says Gary Kirkner, president. Colonial is also further emphasizing its expertise in benefits communications, expanding into service offerings in addition to products, and characterizing its forte as "consultative sales."
"We see that a successful worksite company needs four capabilities: face-to-face, interactive voice response, the ability to do good group presentations, and Internet," Kirkner says. "We have all four of those now, and what we'd like to do is approach a customer and say, 'We will do this any way you want, and in any combination.'" Summing up the competitive voluntary benefits business, Kirkner stresses, "You can't rest on your laurels."
Non-traditional approaches to worksite marketing of voluntary products will have better results as people become increasingly accepting of new technologies such as Internet/intranet and interactive voice recognition, says Jack Gohsler, senior vice president, Conning & Co. (Hartford). "People are much more accepting of these. And that's important, because you can have the best technology, but if people aren't accepting of it, it's not going to work," he says. On the provider side, Gohsler adds, "products must be simplified or structured to make it easier for the individual to make decisions and carry through the transaction alone."
If those two factors are in place, carriers can reach a large underserved market, Gohsler says. "Studies show the middle-income segment of our society doesn't have the access to insurance distribution it once had," he says. "Agents don't focus on those markets because...the business value is not there. But if more major players are marketing online, even though the products are low cost, it's a model that can appeal to more people."
CUSTOMER CHOICE
The appeal to the individual consumer can be a wider array of choice, says Steve Fecko, senior vice president of marketing and business development of Hunt Valley, MD-based RewardsPlus, a Web-based benefits platform provider. "We are able to consolidate and integrate a vast array of best-of-breed benefits from a variety of carriers," he says. What's in it for the carriers themselves? Fecko answers, "For some who aren't able, it allows them to deliver their services in a Web-enabled fashion; for others, it allows them to move toward a choice model; for some it will help them retain business that they might otherwise lose, if a client wants an aggregated approach." He adds that it will also streamline the flow of information, consolidate billing and premium reconciliation and reduce administrative costs on the back end while cutting marketing and distribution costs.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio
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