In the business world, most people adhere to the motto “think big.”
But in the last few years insurers wisely have been re-evaluating the so-called “baby group” market–firms with 2 to 24 employees–and successfully introducing benefits, initiatives and products that answer the needs of this smaller segment.
There are two reasons carriers are increasing their penetration in the small group market–first, the smaller segment is huge. By some estimates, the 2-9 employee market consists of over 6 million employers and employs more than 20 million people. In addition, growth in the number of businesses offering employee benefits has increased substantially.
A second reason is that there are large numbers of uninsured individuals who work for small businesses, which signals opportunity for the market to expand. A group carrier or broker can focus on reaching out to the uninsured, instead of the usual competitive fight to win clients from other competitors.
Several insurance carriers have developed product portfolios augmenting their core business that aim solely at the employers with 2-24 employees.
Clearly, the size of the small group market and the growing number of uninsured individuals who work for small businesses provide brokers with a significant opportunity for growth. However, some brokers mistakenly do not consider the low end of the small business market to be profitable. In addition, the “baby group” business tends to have a more favorable experience than its larger counterparts.
Today’s small business owners are very savvy. They wear many hats. They serve multiple roles. And, they are tasked with many responsibilities. They also play a vital role in offering benefit plans to their employees. They understand that offering a competitive package is the basis for a more productive and focused working environment, which can impact positively the financial success of their own business.
Employers today aren’t just looking for a broker who can sell them competitive products and services. They are looking for a relationship. A strong relationship between the broker and his client provides a solid foundation for the cost-effective benefits plans employers need and employees want.