No, I’m not brain dead, but after spending a few weeks talking to brokers, I feel I need to speak my piece. There is a feeling of doom and gloom, and I can hardly blame people for having this attitude. Turn on the TV and it seems like a new disaster is occurring every week. I propose we take a quick inventory and complete a Ben Franklin list. Ben listed everything good and bad about something to determine what type of decision he should make. So, let’s begin:

1. The Economy. Clearly it’s bad. Clients are laying people off and eliminating lines of coverage to save money. On the P&C side, the market has been soft, translating to less commissions. Ugh. But now the good news. When I started smiling and dialing as a large group benefits broker in 1992, employers were getting 3% rate increases. They couldn’t get off the phone fast enough. Today, every single company is interested in reducing their costs. Create a sound idea (wellness, dependent audits, HSAs) and you are in the door. It was never this easy to get in to a prospect.
2. The Government. I’m not taking a political stance here, but I do know many brokers are concerned over a single payor healthcare system. While it should be noted that our President has not mentioned that as a solution, clearly change is afoot. (Side note: I have spoken with brokers from Canada and England and they do very well with a single payor system.) Even though you cannot control this change, you can take advantage of the complexity that is coming. More to come on that.

Listing these “negatives” reminds me of the story of the shoe salesman who was sent to an island. He called back to HQ and said, “Don’t bother, no one here wears shoes.” The next rep went out and visited the island. He called HQ  and proclaimed, “Send lots of shoes, no one has them here!” You get the idea. I firmly believe agencies can experience some strong growth during this difficult time by picking off the weak competition.

Now, let’s talk about the positives:

1. There is no better time to open doors as a broker. Want more proof? In a survey of over 1200 HR Professionals across the country, 6 out of 10 respondents said they would consider looking for a new broker if their current broker didn’t provide thoughtful communication and value added services.  Here is a question for you: The new stimulus package had legislative changes to COBRA.  Do your clients know about it? From who? Here is another one: With the economic downturn, have you given clients information on a dependent audit? Quite simply, if you want to open doors, talk about ideas that will save money.  (By the way, this does not imply just taking them out to bid. That’s a topic for another day…) On the P&C front, I know of a broker in Tennessee who just scored a $20,000 broker of record letter by asking “how are you protecting the financial viability of your organization” and discussing business contingency planning. Bottom line, everyone is struggling – including your competition. Now is the time to strike!
2. Diversity. Many brokers can easily diversify their book into multiple areas such as wellness, retirement, different size accounts, various industries, P&C, and voluntary. As a broker, the world is our oyster.
3. We are desirable. (I love that line) People not only want but need what we have. We have necessary products. We are providing a service by emphasizing what’s being offered in the industry. Don’t believe it? Might want to rethink your career choice. In the same survey mentioned above, the vast majority of clients highly value broker services. In the current market, we couldn’t ask for a more fertile hunting ground.
4. Recurring revenue. Many industries would love to have this. Not only that, most brokers are still experiencing high retention. Most of us left group rep jobs to become a broker. As a group rep, everything was reset to zero each January. Being a broker gives us the luxury of building a recurring revenue base. I’m not saying it is not difficult to renew business, but I’d rather have a million-dollar book than have to scare up a million new dollars every year.
5. Market-leading resources. The job of a broker has evolved in recent years. We now discuss things like employee portals and online enrollment. On the P&C side, successful brokers are packaging their value with tools like fraud reduction programs and OSHA Compliance. We deliver high value to employers, even more so as HR resources get reduced or eliminated. As technology matures, options increase, giving you the tools to differentiate yourself in your market. A great position to be in during tough times.

In summary, I am seeing brokers seizing opportunities and brokers that are pulling back. The question you have to ask yourself is – which one am I?