Why Building a Benefits Department Is Good Business

For many property and casualty agents, the realm of employee benefits might seem like a strange and mysterious world outside of their normal business. But what if it could be a way of strategically meeting the clients’ needs and building client relationships in a less traditional way?

Agencies that serve businesses already understand their risks.

Consider all of the businesses you work with; whether you consider yourself a generalist or specialist, by the time you work with a client for a couple of years, you should have a good working knowledge of the risks that the business faces from a P&C standpoint. On top of that, if you’re already writing their workers’ compensation insurance, that gives you more insights. You know how large their team is and potentially how well they are finding and keeping the high-quality team they need.

Understanding a clients’ risks is a basic part of helping them with their insurance. You spend time getting applications completed, reviewing property valuation reports and lists of personal property (and contractors’ equipment). You may be at their locations, taking pictures, or looking at policies and procedures, depending on the coverages that you’re working on.

The question then becomes why wouldn’t you be able to help them with their employee benefits, as well. Of course, licensing may be a hang up, but that’s a small hurdle to overcome. It’s only a matter of determining who would work through the licensing process. If that’s something an agency hasn’t contemplated doing in the past, consider that broadening the types of licenses the agency holds only broadens the product selections that can be sold.

This is about having a broad risk management skill set.

As an agency builds relationships with their clients and gains an understanding of their risks, we would expect that they could make additional recommendations, or at least make additional offers of insurance that meet different insurable exposures. While the arena of employee benefits doesn’t fit neatly into the realm of the P&C agent, that doesn’t mean that it can’t fit.

Hiring trends and markets fluctuate just like any other part of the business market. With that, the expectations people bring to jobs change, too. Paid time off, 401(k), medical, dental, vision, and other benefits are the baseline expectations of new employees. While the P&C agent probably shouldn’t be making detailed recommendations related to all of these, helping clients build their benefits packages can help mitigate some of their employee turnover and onboarding risks.

Clients (and their employees) need someone who understands benefits.

The P&C agent is already the insurance professional in the room, so it only makes sense that you could also be there to help clients choose their benefits packages, how they work, and who should participate in them.

Medical coverage from company to company is similar. The primary difference between carriers is the network of providers that accepts each company’s offerings. From a coverage perspective, that means that we aren’t necessarily looking at which company will provide the best coverage, but likely more importantly, which one is providing the best network for the best price range in the area.

Additionally, understanding how monthly premiums, deductibles, co-pay structures, and out-of-pocket maximums work will help clients to determine what plans make the most sense for the group to offer and whether to offer multiple plans to the team.

This is also another way of helping clients to understand the value of how offering additional insurance benefits can help them to mitigate their employee turnover risks. This is where you can help clients understand why they might consider additional benefits, such as group life, long-term disability, dental, and vision. These additional benefits can help your client stand out in the employment space as they are trying to hire and keep the high-quality team their business needs.

Building a benefits segment is a business decision worth considering. Take a hard look at the cost in licensing, marketing, staffing, training, and servicing the segment. The potential upside is significant. Your clients already trust your team to protect other parts of their business. Adding benefits gives you another way to secure your clients, solve a real problem, and create more reasons for them to stay connected to your agency over time.