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From Resource, March 2006
Copyright by LOMA
Service
Needs of Intermediaries
In
a recent study of intermediaries in the group life insurance industry, Minnesota
Life set out to learn more about the qualities
intermediaries look for in a group insurance carrier, the kind of relationship
they like to build with a carrier, and the things a carrier can do (and avoid
doing) to help make that happen. Here’s what they learned.
By Stephen Hall
Insurance
brokers and consultants prefer group life insurance carriers who are
service-oriented, competitive, and financially strong. When it comes to
establishing and maintaining relationships with them, intermediaries prefer a
combination of in-person visits, e-mails and phone calls—but because they’re
already inundated with information from carriers, they don’t want to be
contacted too
frequently. The occasional lunch with a carrier’s rep is fine, but they tend
to frown on anything more extravagant (i.e., dinners, golf games, sporting
events or trips). Their clients like to do as many things online as possible, so
intermediaries prefer carriers who offer online access to forms, contracts and
other resources. They prefer life-only carriers over “one-stop shops.” And
while a carrier’s low rates might win their business, poor service will lose
it.
Those were among
the findings of Minnesota Life Group Insurance’s (a Securian Financial Group
affiliate) recent interviews with 30 insurance brokers and consultants
(“intermediaries”)—some of whom have done business with Minnesota Life in
the past, and some of whom haven’t. The study was launched to gather opinions
from benefits consultants and brokers to identify their expectations and
marketing preferences among group life insurance carriers whom they would
recommend. It was designed to focus on three key areas: intermediaries’
expectations of carriers, their preferences regarding how they are marketed to,
and the carriers they most often recommend.
“We
were curious about whether there was consistency among the consultants and
brokers that we work with, in terms of what’s important to them,” said Bill
Markwardt, vice president of group life sales for Minnesota Life Group
Insurance. “We wanted to make sure that what we were doing and what we were
presenting to them as a company was pertinent to their interests. For the most
part, our salespeople agreed on what was important to the producers we work
with. But there were some differences regionally, and we wanted to find out if
there was really that much of a difference.”
The
study’s findings also proved invaluable to an internal task force at Minnesota
Life that was created to help ensure the company is providing best-in-class
service to its producer audience. But before the task force could do this
effectively, they needed to better understand exactly what “best-in-class
service” means, as far as intermediaries were concerned. The study’s
findings helped them do this. “We were able to match up our services with the
things that, according to the study’s findings, are important to producers to
make sure we’re on track with our service,” said Paula Bilitz, marketing
director for Minnesota Life Group Insurance. “This task force marched through
each of the criteria that we identified as being very important to producers and
then rated ourselves to determine whether each particular area was something we
did well, something we needed to work on, or something that doesn’t really
pertain to our marketplace and therefore something we don’t need to worry
about. And just about every one of the criteria that was identified as important
to the producer was an area we consider a strength.”
Study
Results Mean Good News for
Minnesota
Life
Very
few of the study’s findings were surprising for Minnesota Life because,
according to Markwardt, the portion of its sales force that interacts with
intermediaries is “an experienced group that’s been working with producers
for many years.” Still, the study confirmed that many of the things Minnesota
Life does to try to serve insurance brokers and consultants are exactly the
kinds of things it should be doing.
“We
were reassured when they said that they wanted to be contacted on a regular
basis and that we weren’t annoying them by calling on them too frequently,”
Bilitz said. “It was also reassuring to know that when we have something of
value to share with them, they really do want to hear from us. We also learned
that what was paramount to them was the service that we provide—not just to
them, but to their clients. If we do a good job of serving their clients, that
makes them very happy, because it makes them look good for recommending us—and
as the insurance company with the industry’s highest client retention rate,
that is definitely good news for us.”
Minnesota
Life’s approach to attracting intermediaries is to emphasize service and to
let rates move to where mortality experience indicates they should be, according
to Markwardt. “It’s a very competitive marketplace, so sometimes the
competitive nature of the business does drive where rates end up,” he said.
“In the short run, you might be able to win if you attack on a rate basis. But
in the long run, service is what’s going to win you business as well as keep
business.”
Getting
to Know Intermediaries: What’s the Best Approach?
According
to the study’s findings, when it comes to how carriers interact with
intermediaries, the latter group’s preference is a combination of in-person
visits, e-mails and phone calls. Markwardt said this finding reinforces what he
has seen in the industry. “Many producers are starting to do all of their
request for proposal activity electronically, so e-mails are important when RFPs
are electronic,” he said. “And when it comes to tracking what’s going on
in a specific process, e-mails become very important.” But while these
high-tech tools have enabled the completion of certain tasks that once required
an in-person visit to get done, Markwardt stressed that in-person visits are in
no danger of becoming obsolete. “They are still very important, because
that’s where you establish a relationship with producers,” he said.
“It’s tough to establish a relationship just through e-mails and telephone
calls. I think most carriers balance all three modes of communication well,
because they’re required to by the producers they’re working with.”
Still,
with more and more clients and intermediaries wanting to get things done online,
being able to accommodate that demand is crucial for any carrier. “Online bid
processes, online auctions, online RFPs and online submissions are becoming more
prevalent,” Markwardt said. “Certainly we’re becoming more proficient at
it and are very comfortable doing it online, and I would imagine most of our
competitors are equally comfortable doing business online.”
“Since
we are really the leader in technology in the group life insurance business,
sometimes we just take it for granted that everybody has the same
capabilities,” Bilitz added. “And so we’re actually surprised sometimes
when we talk to prospective clients and find out that they were never offered
some of the things that we would just offer as a matter of course. But we do
know that producers really appreciate the technology that we can provide their
clients. It makes their job easier as well. If we can provide a lot of the
information and forms and services online, then they don’t have to call their
producer and request certain information or a certain form or service. They can
just go online to obtain those resources, and it makes everybody’s life a lot
easier.”
But
whatever an intermediary’s preferred mode of communication may be, another
vital point that Bilitz drew from the study is how important it is to just
communicate—to provide intermediaries with the information that will help them
do their jobs better, and thus make their relationship with the carrier that
much more valuable. “The study indicated that the mode of delivering
information is not as important as the information itself,” Bilitz said. “If
you have something of value to say or communicate, they would welcome it in any
form. They would love to have you stop by; they would love to have you e-mail it
to them; they would love to have you call them and tell them you have something
to share. And one of the strengths of Minnesota Life is that in the life market,
we are the experts. Sometimes consultants and brokers carry a broad range of
products, and they cannot be experts at every single type of product that they
represent. So they rely on us to be the experts for them, and when we have
something of value to share that will help them present the life product to
their client, they welcome it in any form.”
Getting
Feedback from
Intermediaries: A Qualitative Approach
Given
the vast number of brokers and consultants that Minnesota Life could have
surveyed for the study, as well as the wide variation in feedback that would
have resulted from interviewing so many, Minnesota Life determined that a
quantitative approach was probably not the most practical method. “It would
have been difficult to get enough participants to do a quantitative study or a
representative sample—enough participants to allow us to say, ‘This is what
they all think,’” said Michelle Hall, manager of marketing research for
Securian Financial Group, Inc.
Therefore,
the company opted for a qualitative approach to gathering data. “We had about
230 names that we acquired from a prospect list,” Hall explained. “This list
of 230 gave us a good mix of brokers and consultants from different regions in
the
U.S.
” After trying to contact the 230,
Minnesota
Life found 30 intermediaries who agreed to be interviewed—a 12 percent
response rate.
For
the interviews, Minnesota Life teamed up with a professional qualitative
moderator who had experience working with focus groups. “She has a very open,
conversational style, and we’ve worked with her in the past,” Hall said.
“Instead of using the kind of format you see in surveys, where the respondent
is asked, ‘How do you feel about X on a scale of one to 10,’ the whole
questionnaire was designed more around talking points and discussion areas. We
looked at categories of interest and then developed some open-ended questions.
The interviewer would just jump in and get them talking, and they would go
through the questions and have a conversation with her. When all was said and
done, they probably didn’t even know they were being asked specific
questions.”
Hall
said the most noteworthy thing about the survey results from her standpoint was
the consistency of the responses. “Overall, what we heard was pretty
consistent, as far as how they manage their practice, what their expectations of
carriers are, and how they choose to do business,” she said. “I think it
confirmed a lot of things that we ideally wanted to know, such as whether they
care about good service and where price falls in the grand scheme of things, as
far as how they decide who to do business with. And I’m comforted by the fact
that poor service is something they look at. You can be the low-cost provider,
but certainly they’re going to look at your other qualifications. Also, we
like the fact that most of them are open to on-site visits—more than you might
think. Also, they said they’re interested in new carriers. I think that might
have been one thing that was noteworthy for us. They said, ‘I really do want
to know about new opportunities, because I wouldn’t be doing my job
otherwise.’”
The
Survey Results: What
Do
Intermediaries Think?
Jeff
Brunsberg, executive vice president of Discovery Benefits, an administrator of
health spending accounts (HSAs), flexible spending accounts (FSAs), health
reimbursement arrangements (HRAs), COBRA and payroll administration, said the
survey’s results accurately reflect many of the things that are important to
the insurance brokers and consultants he works with. “In this day and age, it
continues to be surprising that organizations overlook the importance of
customer service,” he said. “And I think the fact that this phenomenon keeps
popping up in study after study has to be somewhat alarming. Customer service is
relatively expensive, because it typically involves people and is all too often
overshadowed by technology. We have found that cutting-edge technology is
essential, but must never overshadow the importance of quality people.”
There
are so many moving parts in the world of a broker or a consultant, Brunsberg
explained, and so anything a carrier can do to simplify life for them is greatly
appreciated. “I think that in some cases, carriers put the frills out in front
of the service,” he said. “Products and services are so fundamentally
similar that it becomes very difficult to differentiate based on this aspect
alone. Consultants and brokers must fully trust that you exist to add value to
their clients. The customer service has to be in place, and they don’t want to
hear from you again. They just want to place the business with you, confident
that you will get it done for their client. Because in our world, we’re a very
small part of the total equation from the perspective of a consultant or broker,
and if we do a good job, we get a lot of opportunities. If we perform poorly, we
get removed from the equation.”
Barry
Lundquist, CLU, founder and principal of Eastport Marketing Group, a consulting
and marketing services firm that works with insurance companies and distributors
of insurance products, agreed. “Intermediaries are looking for a carrier and a
sales rep who will make their life easy,” he said. “They don’t want the
carrier to outshine them, but they do want the carrier to make them look good in
front of their client, to give them the right tools, and to help them
demonstrate to the client that they’re giving them the right recommendation.
But there are no silver bullets. I think carriers are often looking for some
secret ingredient that is going to make them better, but there really isn’t
any. It’s really a matter of substance versus style, and I think the study’s
results are a good affirmation that that’s what carriers need to focus on:
taking care of the fundamentals and providing good service.”
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