According to MetLife’s inaugural Broker and Consultant Study, more than half (52%) of brokers and consultants with large clients (those with 1,000 or more employees) are very optimistic about the growth potential of their firms as are approximately one-third (31%) of those with small and mid-sized clients.
In contrast, however, only 25% of benefits brokers and consultants with large clients and 12% with small and mid-sized clients are very optimistic about the benefits industry overall. Three out of five respondents expect employer-paid medical insurance will still be an important growth opportunity in the next three years, but 73% are very concerned about reductions in medical insurance commissions in light of health care reform.
“With new challenges for employers often come new opportunities for those brokers and consultants who can bring creative solutions to the table. While wary of how health care reform might change their own business operations as well as those of their clients, four out of five benefits brokers and consultants say their firms are actively exploring new models and strategies in order to stay relevant and pursue growth opportunities,” said Anthony J. Nugent, executive vice president, U.S. Business, MetLife, in a press release.Nearly three-fourths of brokers and consultants expect their clients to rely on them even more three years from now than they do today. Virtually all respondents (97%) feel they have worked hard to keep their clients up-to-date on health care reform developments.
Benefits Brokers’ and Consultants’ Concerns
Over two-thirds of brokers and consultants in the MetLife study expressed concern that the slow economic recovery may cause employers to cut benefits – particularly small and mid-sized employers. Among advisers with clients with 1,000 or more employees, the top concerns are keeping up with legislative changes and their impact (68%); maintaining/growing top-line revenue at the firm (63%); and attracting and retaining clients (62%). For brokers and consultants with clients with fewer than 1,000 employees, the top concerns are reductions in commissions due to medical loss ratio (85%); maintaining/growing top-line revenue at the firm (82%); and keeping up with legislative changes and their impact (78%).
Brokers and consultants in the study identified a wide range of potential strategies that they believe could increase the overall profitability and sustainability of their firms. The most popular strategies are enhancing consulting services, selling more voluntary and ancillary products, and playing a greater role in health and wellness.
The study found that 58% of brokers and consultants see an opportunity to enhance or expand their broker consulting services. The same amount also see a potential to sell more voluntary benefits and ancillary products over the next three years as important initiatives to increase their firm’s profitability and sustainability in a post healthcare reform world. In addition, by 2013, more than half of brokers and consultants expect to see more opportunities to help clients with benefits administration such as enrollment, billing and claims.A copy of the study is available at www.metlife.com/brokerstudy.
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