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P-C Benefits Add Value, Not Costs, For Employers


Caroline McDonald

At a time when the costs of providing employee benefits are escalating, employers are searching for low-cost ways to keep valued employees happy while also attracting new, high-quality workers. Property-casualty offerings via a voluntary benefits program often fit the bill.

Some insurers as well as independent agencies are benefiting from this trend by maximizing efforts to offer p-c and more unusual lines to employees of organizations around the country.

“Voluntary products, which are products employees pay for, are important ways for a company to meet their needs to decrease costs–including benefits costs–and maintain their relationship with employees,” said Jean Hamilton, chief executive officer at Prudential Institutional in Newark, N.J.

“Voluntary benefits are valued because employees get group rates, so theyre more attractive than buying individually. They also have payroll deduction, which makes [payment] more convenient,” she added.

A wide range of benefits are available on a technology platform called “Working Solutions,” Ms. Hamilton said. “We provide the platform to the employer with their sponsorship. Its seamless, and goes right along with what the employer is doing on its [employee] intranet.”

She said the technology platform is available now and that products are being “phased in. Were in the reasonably early stages of marketing, but weve had some major companies that we will be working with.”

Ms. Hamilton explained that the voluntary benefits program “has opened up new channels as well as relied on some existing channels.” Prudential has “more than 24,000 institutional clients, including 83 Fortune 100 companies,” and targets employers with “progressive human resources departments and intranet capabilities.”

Some of the products, such as group life, are “manufactured by the company,” she said.

The most popular p-c coverages, homeowners and auto, are “very important products which everybody needs,” she added. “They can be attractive because of the group rate. The acid test is that people like to buy their home and auto [coverage] this way.”

Some other products are offered that the company “doesnt choose to manufacture,” which include vision, legal and dental coverages and “an increasingly popular pet insurance policy,” Ms. Hamilton explained.

Ms. Hamilton said Prudential markets its program directly to organizations and through individual insurance agents, who she called “an important part of distribution.”

Some of the carriers products, including long-term care, are also marketed through the agency network. Prudentials retirement services, which include 401(k) plans, are marketed through consultants and brokers as well as the companys financial advisors, she said, adding, “it runs the gamut of distribution channels.”

Pamela Rekow, a representative of The Hartford, said the Connecticut-based company offered a voluntary benefit program to clients until a “few years ago” but “backed off,” deciding that the program was “not an area of emphasis for us at this point.” The Hartford offers a voluntary benefits program to its own employees, she noted.

Anne Ellis, an Atlantic Mutual Insurance Group representative, said the New York-based company offers a voluntary program on a limited basis but is “in the process of reforming our strategy.”

Representatives from Allstate, Chubb and CNA said their respective companies do not offer a voluntary benefits program to clients.

Agencies also are finding a niche in the non-life benefits market. Nancy Pizzuti, payroll deduction specialist and producer at Haylor, Freyer & Coon, Inc., in Syracuse, N.Y., said her agency works with 11 insurers to offer a variety of products for its payroll deduction program for employer groups.

Unlike most companies, which target medium to large-size organizations, agencies can offer programs to organizations of any size, she said.

Costs of coverage to employees remain the same whether there are “two or 200,” she said, “because we do the billing here.” She said the agencys software allows them to directly bill employers for their employees payroll deductions.

“We have all personal lines products available,” Ms. Pizzuti said, including auto, homeowners, umbrella, boats, snowmobiles, dwelling fires, landlord packages and “anything in personal lines.”

The agency has offered the program since 1996 and works with 30 employer groups and credit unions, all based in New York State, she said.

“The employees that give it a try love it,” she said. “Retention is better, they dont tend to shop, its coming out of their payroll and they dont even think about it.” The most popular coverages, she said, are auto and homeowners.

“We have some who take the full gamut, but mostly were selling this coverage to the blue collar-type employee,” Ms. Pizzuti said.

Benefits to employees include the multiple markets available to them, convenience and savings of service charges, which can range from $3 to $10 in installment fees. Questions, billing and endorsements are all handled by the agency, she explained.

For employers, establishing a voluntary program is a “way of offering an employee benefit with no cost to them,” she said. “Employers have no administrative expense and no investment.”

Ms. Pizzuti said the agency does onsite quoting at benefits fairs as well as open enrollment. “We can even bind onsite,” she said.

Reproduced from National Underwriter Life & Health/Financial Services Edition, October 8, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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