Transamerica Employee Benefits enjoys voluntary business growth
Flexible products and powerful sales tools drive agent success
By Dave Willis
As health care costs continue to rise, many segments of the worksite benefits business are growing. For instance, LIMRA data show industry-wide sales of voluntary critical illness and accident insurance increasing about 25% each from 2010 to 2011. Voluntary whole life was up just over 10% year over year; voluntary medical products, including hospital indemnity and supplemental medical offerings, rose by just under 8%; and voluntary short-term disability grew 4% in 2011.
Transamerica Employee Benefits, a marketing unit of Transamerica Life Insurance Company, also is enjoying growth in the voluntary market, at rates higher—sometimes a lot higher—than industry averages. "We've retooled some of our products," explains John Stanley, chief marketing officer, "and we've expanded our sales activities. We have an increased local sales presence, and we have a greater focus on agents and brokers, consultants and specialty enrollment communications firms."
Critical illness and accident
The company's cancer and critical illness business is growing at a rate about 25% higher than the industry average. "We're seeing much greater acceptance by traditional brokers and consultants, as well as employers, that this is a viable and valuable product that fits well into an overall employee benefits portfolio strategy," Stanley notes.
The company re-filed and re-launched its critical illness offering about a year ago. "We created a product that is more flexible and price-competitive," Stanley explains. "This allows agents and brokers to present a product to employers of all sizes that lets them offer another valuable added benefit to their employees."
Voluntary accident insurance sales also are up at Transamerica Employee Benefits. "We've more than doubled our accident sales," Stanley says. "Part of the reason for this significant increase is the fact that we bundle it, along with our critical illness product and medical gap coverage, into our HealthPak." The combined product is popular with a broad range of employers, particularly mid-market firms with fewer than 200 employees.
"Much of this business is driven by our MGAs, such as Paragon Partners and Excelsior, who cater to independent agents and brokers," Stanley notes. "Our MGAs work with retail agents on everything from client procurement and employee enrollment to account support and renewals." The MGA partners have actually helped Transamerica design the product and drive its marketplace rollout, he adds.
The flexibility of the HealthPak product plays a major role in its acceptance by the market. "There are thousands of plan design options and choices for both employers and employees to tap into," Stanley notes. "The product can respond to employer needs, based on their employee demographics, current benefit structure and overall needs."
The enrollment process for HealthPak has been simplified. "This has provided agents and brokers with a very simple approach to rolling it out to their clients," Stanley says. "We think that has been a huge competitive advantage in the marketplace and will continue to be one."
Stanley expects voluntary accident insurance to grow in popularity as traditional health care costs continue to increase. "Employers are looking for ways to reduce their medical benefit expenses," he comments, "but they don't necessarily want to reduce the benefits they offer their employees. An accident plan can offer a sustainable benefit structure for employees, and it's extremely cost-effective. It can create a win-win situation for both the employer and the employee."
Life, disability and more
Voluntary whole life is another area where sales growth at Transamerica Worksite Benefits eclipses industry averages. "We have built tremendous relationships with specialty enrollment communications firms that specialize in life insurance," Stanley says.
"In addition, we have done extensive education and training with traditional benefits brokers, property/casualty agents, and brokers with benefits clients. This helps agents better understand how to position voluntary permanent life products, how to enroll employees, and how to work with employer human resources staff."
Add-ons to voluntary permanent life insurance also contribute to the product's success. "Enhanced long-term care provisions within these products resonate extremely well in the market," Stanley says. "The fact that employees can purchase voluntary life insurance with long-term care provisions helps meet a need many will face later in life."
In addition, he says, changes in traditional life insurance sales processes have had a positive effect. "Employees continue to have fewer and fewer access points for permanent life insurance coverage," he explains. "While overall life insurance sales are at a 50-year low, the workplace is fast becoming the main place for employees to access these products and services.
"We expect to see more and more employers offer these products at the worksite, and that spells tremendous opportunity for agents and brokers who already have relationships with employers," Stanley notes. "They can be the ones who bring these products to the forefront."
Transamerica Worksite Benefits also is enjoying growth in other voluntary product lines, including disability and medical. "There is increased awareness in the marketplace that employees need disability coverage," Stanley points out. "We have increased our marketing efforts, we've bolstered our sales staff, and we continue to educate our distributors on the product." The company also re-priced its product and tweaked certain elements to enhance its competitiveness.
"We see a continued migration of the disability marketplace away from employer-paid plans to voluntary programs," Stanley observes. "A LIMRA study shows that more than a third of people shop for disability at work, and 70% of them decide to purchase. Agents and brokers can get in on the trend by making these products available to their clients."
Growth in the company's voluntary medical business is about three times that of the industry as a whole. "Our goal is to provide employees with supplemental products that help them protect their financial future," Stanley says. "Our products are extremely competitive today, and we will continue to refine them to adjust to changes that may occur as a result of the Affordable Care Act, so they meet the ongoing needs and demands of both employers and employees."
Agent and broker opportunities
All of these changes spell good news for agents and brokers. "For brokers who may be seeing their health insurance commissions reduced, access to these voluntary products can help replace that," Stanley explains. "This ultimately lets the agent continue to provide the exceptional levels of service required to maintain good client relationships."
For agents and brokers who may not yet be active in the voluntary space, he offers this advice: "Your in-force book of business represents a tremendous opportunity for growth. Surveys show that, for most agents and brokers, a very small percentage of revenue comes from voluntary products. This represents a great opportunity for producers to cross-sell and to increase value to the employers they already serve. It's a huge opportunity."
Transamerica Employee Benefits is willing and able to help agents and brokers who want to grow their voluntary book. The company is building out its distribution network and is investing in technology and other services to support the network. "Our regional vice presidents are doing a tremendous job, as is our sales team, in bringing new agents into the family," Stanley notes.
"Our people are working with agents across all disciplines, from traditional P&C agents to dedicated voluntary benefit organizations to traditional employee benefit firms catering to clients of all sizes." Today the company works with approximately 10,000 licensed agents across the country, and that number continues to grow.
Tech and sales support
Over the past couple of years, Transamerica Employee Benefits has made significant upgrades in the technology it offers to support agents and brokers. "More and more of our agents, brokers, consultants and enrollment firm partners see us as leading the way relative to embracing technology that supports growth in all product categories," Stanley remarks. "Our goal is to enable our agents, brokers and consultants to do their job as efficiently and profitably as possible."
The company has expanded its Web services and is focused on integration with third-party systems and enrollment and administration platforms. "We provide broker access to an enrollment solution that works well with other platforms," Stanley says. "Our Web-based system makes it easier for MGAs and their agents to manage additions, terminations and other changes in a very streamlined environment. And we continue to look at potential investments in decision support tools and data analytic services to help producers and employees work more efficiently."
The company also has staffed up to support agents and build its voluntary business. "We have expanded our field sales organization," Stanley says. "We continue to invest in people, led by Brad Ridnour, our national sales director, and Eric Leduc, our national vice president of health distribution. Identifying and hiring top talent will continue to be a strong emphasis as we move forward.
"We also have expanded our account management team," he says. "Recruiting, hiring and training top talent to support the 10,000-plus agents who work with us is critical to our success. We have worked hard to gain a better understanding of our distribution partners' strategy, understand their needs, and then build a model to support their growth." One such initiative is the development of a national accounts practice that provides support for customer procurement and after-the-sale service.
The company also has bolstered its Special Markets group. "This group, led by Brian Thompson, is responsible for creating new markets for Transamerica Employee Benefits by working with senior leadership to identify potential new markets," Stanley says. "Today his group is focused on the service contract space and the government sector, and we're excited about the growth opportunities there."
Learn and do
Stanley is excited not only about changes and growth within his company, but also about the potential positive impact for its distribution partners. "Agents and brokers need to become more educated in these products, so that they feel comfortable talking to their clients about them," he asserts. "I think there has been a fear of the unknown when it comes to these products.
"As employer and employee awareness and acceptance increase, there will be significantly more growth opportunities for local producers," Stanley says. "We believe we bring to the table some extremely competitive products, and we're confident that we have the processes and people in place that make it easy for agents and brokers to share our products with employers they already serve—and those they'd like to."
His parting advice to agents and brokers is simple: "Invest the effort to make voluntary worksite products available to your clients. I believe you'll be surprised by the acceptance rate and participation in the plans."
For more information:
Transamerica Employee Benefits
Web site: www.transamericaemployeebenefits.com