MAKING WORKSITE MARKETING WORK

Rough Notes, May 2005 by Carcione, Sandra

Agent strategies for delivering employee-paid personal lines products via employers

Thinking of getting into worksite marketing? It might be a good move, if you take it slow and approach this venture strategically. Worksite marketing usually involves selling voluntary (employee-paid) insurance products in the workplace with the approval of employers, and with premiums paid through payroll deduction.

A growing number of property/ casualty agents are selling personal lines products-and other insurance products-via worksite marketing; and they agree that this approach is a good source of profitable, easily renewable business if handled correctly.

How does worksite marketing operate for these agencies? Most of the agents we spoke with start out by holding group meetings during work hours and then following up individually with those who are interested in buying.

The "why" of worksite marketing

Many agencies see worksite marketing as a way to cross-sell commercial accounts as well as tie the companies more closely to the agencies. Also, an increasing number of insurance carriers want to use independent agents as a distribution channel, because of their ties to commercial businesses. Many insurers have even implemented dedicated divisions to help agents market their products.

Some agencies, such as the RHK Group in Dublin, Ohio, and the Sinclair Insurance Group in Wallingford, Connecticut, got into worksite marketing because it is more efficient to sell personal line products "in bunches" rather than through one-on-one telemarketing or direct mail.

Other agencies, like the 110-yearold Mang Insurance Agency in Norwich, New York, which represents 20 companies, started selling voluntary benefits when the economy took a dip a few years ago. "We have 12 offices, all in small towns, and many companies couldn't afford to offer company-paid benefit packages to their employees," says Dennis Mirabito, vice president. "We filled a need in these communities by providing voluntary benefits." Today more than 100 companies buy insurance products through payroll deduction from the Mang Agency.

Studies confirm an increase in demand from employers and employees for payroll deduction voluntary benefit programs. A survey conducted in 2003 by LIMRA showed that more than half of the nation's employers offer at least one voluntary benefit and that another 25% are interested in either introducing or expanding offerings. In a similar study by MetLife, nearly one-third of employees surveyed said they are interested in having their employer provide a wider range of voluntary benefits.

The key to successful implementation of worksite marketing, agents say, is to lay out a solid strategy regarding what products you want to offer initially, what agency resources you are willing to commit, which carriers you want to partner with and how you will handle enrollment-internally or through a vendor. It's equally important to test the system before rollout.

Mang Insurance, for example, used its own 70 employees as test cases for worksite marketing. "We hired a payroll person to set up the system and work out any administrative bugs. Then we used our own employees to test the process," says Mirabito. "We then opened it up to a couple of our commercial accounts. They were very patient with us."

Ron Mooney, owner of the RHK Group, agrees that agents should take it slow at first and temper their expectations. "You may spend a fair amount of money to get it started, hire someone to take care of administrative responsibilities, and then find that you need to present to a lot of groups before you begin to see good penetration," he says. Mooney's agency has eight employees and about $6 million in premium. It has been involved in worksite marketing for six years and now has 40 companies of various sizes whose employees buy auto, homeowners and other voluntary benefits through payroll deduction.

Too many agents have jumped into worksite marketing with expectations of immediate profits, according to David Sinclair, president of the Sinclair Insurance Group, which has $26 million in auto/homeowners premium volume. "When agents don't get immediate stellar results, they jump right back out," says Sinclair. "You need a lot of patience." Sinclair's agency partners with local Chambers of Commerce and community banks to sell personal lines products to members and customers, respectively.

Mooney agrees that patience is a virtue when it comes to worksite marketing. He says it probably takes two to three years to do it efficiently.

Selling a broad mix of products

An agency will have more opportunity to reap profits from worksite marketing if it sells a wide range of voluntary benefit products. In addition to auto and homeowners, some P-C agencies are selling life, disability and other voluntary employee benefit products through payroll deduction.

Auto and homeowners were the initial products that RHK Group sold through worksite marketing, but today the agency also sells disability, life, and dental insurance. He adds, "We provide all product lines directly through our agency and do all enrollments and ongoing service-related work."