Selling group products on price will leave advisers open to client poaching, writes Paul Avis. So, are group risk advisers operating a smart business model?
Some providers offer online and phone-based legal support services as part of GIP – to help contain legal fees and retainer costs. Second diagnosis services may be made available and can help with the management of private medical claim costs.
So, as price management in this market is top of many employers’ cost concerns, they are worth having, offering as they do a service to support clinical and treatment certainty.
The quality of the insured products on offer leads to the conclusion that assessing the total value of a provider’s proposition within the preference/recommendation, in addition to ensuring the client is given all rate/price leader details, may affect the decision. In doing so, it may also help to regenerate commission income previously reduced through low-rate chasing activity.
Advisers who chase rates through the fear of other advisers taking the business at less cost should perhaps question the value of the relationship that they have with the client. Most frustrating, from a provider perspective, is the lack of understanding of the range, depth and breadth of what is available.
Conversely, communication of the full range of benefits available could lock out the poaching adviser who has not taken the time to understand the real value of the insurer products.
As a final thought about the value opportunity, there are new group risk clients out there that may be attracted by the promotion of these value rich offerings. Canada Life has quoted limited payment GIP schemes with premiums as low as 0.25% of salary costs and these are made even less expensive by the availability of corporation tax relief.
For this the employer gets an EAP, a second diagnosis service for serious conditions, access to online and telephone legal support, outsourced vocational counselling and access to a fee-based case management service for more difficult and complex scenarios.
They will also get salary continuance during periods of prolonged disability. With all this, any employer that says they cannot afford it should take another look at the possibilities.
There is enough press coverage out there now to confirm that the days of a soft group risk market are over and that all insurers now need to rebalance their books. This in turn may mean commission ‘losses’ will be restored organically.
Getting this right may mean that our industry will actually begin to grow, as will our clients’ understanding and appreciation of what we offer as an industry.
Paul Avis is sales and marketing director at Canada Life
