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A primer on the group benefits renewal process

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Dave Patriarche:

Adrianna brings up a good point. Renewals are much more than the bottom line. Saving 10% may seem like a great thing until you realize there are any number of risk areas that are not being addressed. I often ask prospect if their advisor has done a risk analysis of their plan. Seldom have they, and often the risks are in the millions of dollars.

Work with a group specialist and ask them what your risk assessment results are like. The monthly price you pay doesn’t matter nearly as much as what the cost could be to your company.

Saturday, December 22 at 10:26 am | Reply

William McDonnell:

Ryan: good factual and realistic article. Well done. Bill

Thursday, January 03 at 1:55 pm | Reply

Chris Pryce:

At first blush, I could not help but think that the plan sponsor interviewed in this piece is someone that would not align well with our firm. Mainly because I don’t think that benefits has to be a “I Win” or “You Win” proposition. Partnerships are strongest when the relationship is symbiotic or mutually beneficially. There is a cost to benefit programs, some are tangible costs, i.e. reserves, expenses, etc. Others are intangible costs, such as that for which Dave Patriarche is perhaps referencing in the comments, i.e. “risk.”

If one is solely pre-occupied with keeping the knife sharp, they might be easily coaxed into “Insurer Hopping.” That then creates more “risk” related to conversions, late applicants, active at work, etc. that can create tremendous costs.

Perhaps such a client should gravitate to a self-funded strategy and avoid the “renewal process” altogether.

As professional advisers, we are working all the time in our clients’ best interest. Yes, our fees are a bi-product of the premiums they pay, but the suggestion that we are not working in the best interest, is disturbing. To suggest that we might allow a 10% increase at renewal, that we might generate 5 to 10 basis points in commissions is incongruous with our firm’s values and goals.

Hopefully, our clients value our role in the traditional renewal process and overall relationship, moreso than suggested by this plan sponsor, because if we cannot demonstrate value, we will be seen as an unnecessary and costly layer.

Friday, January 04 at 12:30 pm | Reply

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