To work profitably with PEOs, follow these tips:
Study the PEO industry and its clients. First and foremost, insurance agents need to understand the PEO business and the specific PEOs they want to target. Visit the NAPEO website, www.napeo.org, to find a list of PEOs by state and name along with information on the industry and its key issues.
When targeting a PEO, learn about that company’s client mix–such as the prevalence of businesses with white-collar or with blue-collar workers or businesses in a specific industry niche. PEOs are selective about their clients and seek those interested in offering their employees good benefits and strong HR management.
Increasingly, PEOs market the importance of benefits to businesses interested in investing in their human capital. Most of these businesses want to build a rich selection of benefit options, so there is great potential for agents to offer a variety of insurance products through their relationships with PEOs.
Prepare to answer PEOs’ questions. PEOs assess the risks in each potential business relationship. They will seek verification of the agent’s license and the carrier’s authorization. Many PEOs have clients in multiple states, so they are subject to many different state regulations. They need to know that the insurance provider they are considering is licensed and authorized in each state. PEOs will also appreciate an agent who knows how PEOs are regulated in those states. As of March, for example, there were PEO licensing and registration statutes in 27 states.
Network with the PEO industry leaders. PEOs are growing rapidly, and insurance agents who work with them understand the potential for expanding their market through this conduit. Agents should network with PEO executives and the representatives of insurers and other companies that recognize the power of the PEO for their own businesses.