Benefits Products & Services
From start-up to stalwart in 15 years
Privately owned AlwaysCare Benefits carves a niche in dental & vision
Agents and brokers who value private ownership, entrepreneurial spirit and dedication to customer service do not usually look toward their insurance carriers as role models. Publicly owned insurance companies are the norm, both in property/casualty and employee benefits. On the benefits side, a few huge, monolithic, public-owned insurers dominate the market for the core product—employer-paid health insurance.
Thankfully, there are corners of the benefits field, particularly on the voluntary side, that are more open to insurers of all sizes and philosophies. One privately owned company, Starmount Life Insurance Company and its sister company, AlwaysCare Benefits, present the kind of business model that could, indeed, prove inspirational to independence-minded agents and brokers. Since breaking into the employee benefits field in the mid-'90s, the family-owned company has built a base of more than a half-million benefits customers (members and dependents) for its group dental, vision, accident, life, disability and critical illness coverages.
Starmount and AlwaysCare Benefits are licensed in 48 states and write benefits business through independent agents and brokers primarily in the Midwest, South and Southeast. The majority, but not all, of their business is written on a voluntary basis. Starmount has earned an issuer credit rating of bbb+ and a financial strength rating of B++ from A.M. Best Company, and has been on Inc. magazine's list of the 5,000 fastest growing private companies in the nation for three of the past four years. AlwaysCare has a long-standing partnership with another insurance company which allows it to write all lines of employee benefits on A- rated (Excellent) paper as well. Last year Starmount and AlwaysCare moved to a newly constructed home office building in Baton Rouge, Louisiana.
The organization attributes much of its growth to its ability to build on a customer-focused reputation that it had previously established in a business far afield from employee benefits—the department store business. Starmount Life President Erich Sternberg explains.
"My family owned department stores in Louisiana and Florida, called Maison Blanche, which was the largest family-owned department store in the country. One of the things that distinguished the company was our interest-free credit card. As long as customers paid their minimum balance on time, we didn't charge interest. We followed the philosophy of always trying to see any situation from the customer's viewpoint."
In the early '90s the Sternberg family sold the department stores. But the buyer of the stores didn't want the life insurance company that had been established by Maison Blanche to back the balances of its 600,000 credit card customers. So the Sternbergs hung onto the life company—naming it Starmount—and many of its employees. "We took that retail and customer focus mentality from our stores and brought it to the life insurance company," says Sternberg.
The customer has remained king as Starmount ventured into the employee benefits field. "I think most of our partners (agents and brokers) will back me on this when I say that nine times out of ten we're going to come down on the side of the customer, even if we feel the customer's position is wrong. We just feel like it's the right thing to do," Sternberg emphasizes. "That kind of attitude matters to our agents."
In the mid-'90s Starmount established AlwaysCare Benefits as a platform to expand beyond its individual life product and into the group market. It began by offering group dental; then about four years later it added group vision. With these coverages, and others it has since added (critical illness, life, disability, and accident), AlwaysCare's strategy is to be a one-source solution for its brokers and customers.
"We can write all our coverages, whether they are employer-paid or voluntary, on one application and one enrollment form," says Sternberg. "About one-third of the company's customers have both dental and vision with us."
"Underwriting, pricing and claims are all handled in the home office, except for disability claims, which are farmed out to one of the largest administrators and reinsurers in the country. Our clients can make one phone call—whether it's the agent, the group administrator or the member—to get the answers they need and understand the products." The company makes its phone customer service personnel available six days a week—13 hours a day during the week and six hours on Saturday.
"We're very consultative and service oriented in our support provided to brokers," Sternberg says. "Our support depends on what they are looking for. We have home office enrollers we can send out. Our 17 sales reps are very 'hands-on' as well. They don't hesitate to roll up their sleeves and get involved with enrollment, particularly with new partners who may not be quite as familiar with our products as established agents may be."
A high percentage of AlwaysCare's benefits business is in the under 1,000 lives market. However, Sternberg notes, "We've become comfortable with larger groups as well. We write groups with two employees up to more than 10,000 employees. About 80% of our dental business and about 65%-70% of our vision business is voluntary."
Sternberg explains that marketing of voluntary products is a more long-established practice in the Deep South, where his company's roots are, than in the Midwest, where they also operate. This has provided AlwaysCare Benefits with initial momentum in states such as Louisiana and Mississippi, where it has a strong customer base. Its business in the South extends up the Atlantic Coast into the Carolinas.
Last year AlwaysCare expanded its lineup of voluntary benefits products to include critical illness and accident coverage. It also introduced a dental/vision package plan for the individual market. The fully insured individual product, called AlwaysCare OnePlus, can be marketed to a person who is leaving an employer where they have group coverage.
"We also have a lot of agents who are selling it as new business," says Sternberg. "When a client is buying individual medical, life or disability, this is a great product to plug in there as well. It's pretty easy for a consumer to do the kitchen table economics and figure out if it's a product that will help them. We're finding a good reception for the product."
The product is also ideal, Sternberg says, for groups with part-time employees or independent contractors (1099 workers) for whom they would like to make benefits available. It can be billed individually or list billed.
It's too early to measure the success of these recent additions to the AlwaysCare Benefits portfolio. But the company has established a solid foothold in the group dental and vision market. These are coverages that are purchased to use, in contrast with a disability or critical illness policy, which the customer hopes will not need to be used. So the service component in dental and vision comes into play regularly. It's a good market for a privately owned company whose tradition, even in its department store days, is rooted in strong customer service.