Worksite Producers Say Small Groups Are Winners
Selling insurance at the worksite to small groups of 100 or fewer lives may be this years untold success story.
But producers who target this market are now putting out the wordthat small-group worksite selling is definitely a can-do proposition for agents who want to learn the worksite ropes.
Hear Pepper Krach: “Ive sold a lot of voluntary worksite plans in the past five years, and Ive found theyve become increasingly popular among the smaller groups, especially at 35 lives and up.”
An agent with Kistler Tiffany Benefits in Wayne, Pa., Krach notes that the employee-pay-all products written on a true group, guaranteed-issue basis are especially in demand, particularly in the last two years.
(Note: The industry has begun referring to these worksite-sold true group policies as “voluntary” products. This distinguishes them from “worksite” products, which are individual policies that typically offer discounted [not group] pricing and simplified [not guaranteed] issue. Both are sold at the workplace via payroll deduction, but some employers favor one over the other for unique reasons.)
Worksite selling “is not a get-rich-quick kind of thing,” stresses Jeffrey Sikora, managing partner of The Abacus Group, Albany, Ga. There can be up to a four-month lag, from time of first contact with the employer to end of enrollment, he explains.
“Still, once you start getting enrollments, you start to see volume, and then you build on that,” Sikora says.
Hes been in the worksite business for 29 years, first working with individual worksite products and now focusing more on group voluntary plans. In recent years, his annual sales have grown by 20%, both from new accounts and from existing insured workers who buy additional policies.
Sikora says his experience has taught him that “once you get in (to small-group worksite selling), you get sales.”
Thats not automatic, he stresses. “You do have to sell the coverage (i.e., offer coverage that meets needs and explain it well). You do need to work with a carrier that has the enrollment and administrative systems and philosophical orientation to support this market. And you do have to keep in touch with your groups.”
But, in time and assuming the account is well serviced, agents can make a comfortable living, insists Mary Wojnowski. She is president of Kistler Tiffany Voluntary Benefits Company, a King of Prussia, Pa., insurance brokerage and voluntary products administration firm.
“When starting out, you can sell it as an adjunct to other products,” says Gerald Rappold, vice president of Curtis & Associates Inc., Overland Park, Kan. “But remember, its recurring business, and revenue. Its like a snowball. You start small, use it to retain relationships, then add more each year.”
In time, youll notice that “the employees sell each other on it,” Rappold adds. “They really do!” So, when the next annual enrollment period comes, “if you have kept the communication going, even more employees will sign up.”
Active employees usually dont quit the plan, either, Rappold says.
Whats more, he says, after a while, some employees also ask to buy other products from you, on an individual client basis. “For example, after a recent voluntary term insurance meeting, five workers came up to me, asking about buying individual life insurance,” he says.
The willingness to buy is so strong, that producers interviewed for this article say its not uncommon for the very first enrollment to attract 40% of the eligible group, with the range cited spanning from 30% to 70%.
Those levels can and do fall as employees retire or leave the employer, they point out. But new hires and the previously non-enrolled workers often make up for that drop–and then some–if the agent keeps communicating with the group and employer, says John Korby, a benefits consultant with Nesbit Agencies, Eden Prairie, Minn.
In fact, he says, “communication is everything.
“You need to communicate the value of the benefits the employees are getting at the group meetings, and in the face-to-face sessions. And you need to do this both at initial enrollment and afterwards.”
Commissions on the voluntary plans are levelized, while those for the individual products are heavily loaded up front. This means agents, especially those selling group voluntary products, should sell other types of products, too, when first entering the worksite arena, the pros say.
If you dont, at least plan ahead so you can weather some lean times in the first year or so, they suggest.