The Changing Role of Brokers
With the advent of private exchanges, are brokers headed the way of the travel agent?
Not so according to this article in Employee Benefit Adviser last week, in which Liazon’s Alan Cohen was quoted as saying:
“Private exchanges make the broker’s role much more critical in many areas…”
“[Private exchanges] really are going to do a great job of differentiating between brokers who know what they are doing and do a good job and ones that [don’t].”
“Brokers we work with are really happy because they struggled in the past to differentiate themselves. Products, carriers were the same and every damn spreadsheet looked the same. Now [they] have an opportunity to demonstrate how much better it can be. It’s a tremendous opportunity for the best brokers.”
Brokers will be needed more than ever.
Alan goes on to explain that because employee benefits are complicated, brokers help to make sense of the changing industry.
“Exchanges entirely change the game in numerous ways.”
“There are a number of different exchange providers and they are all so different. The differences are way more complicated than United and Aetna [spreadsheets].”
“This is a multidimensional analysis. Should you be offering a single-carrier exchange with Humana from Liazon or dual-carrier with Aetna-UnitedHealthcare and seven plans? It’s different for different customers.”
The role of clients, in a sense, is changing too.
Alan also talked about how brokers should think of their clients differently, too.
“Every year [there} is a significant level of deep complicated high-end benefit consulting, and we found the most successful brokers … are starting to realize that their client is no longer just the person in human resources, their client is all the people who bought the insurance.”
“Once your clients are all those employees, as long as you serve them well, you keep that client for life. It’s no longer a situation where a new CEO wants their golfing buddy to be their broker.”
Many brokers are optimistic, according to the article.
Brian Murphy, of Lawley Benefits Group which offers the Lawley Marketplace, a private exchange powered by Liazon technology, adds:
“We thought it was a strategy that our employers will embrace…We really thought it put us head and shoulders above our competitors.”
“It was an investment, but you have to constantly reinvest in your business,” he adds.
We at Liazon see private exchanges opening doors for brokers, as well as employers, employees, HR staff, carriers and anyone else who has a stake in employer sponsored benefits. It’s going to be an interesting year for sure.