Brokers and benefits consultants are concerned about the impact of US health reform, but also see potential for growing their businesses, found a MetLife survey. The US insurer found 52% of brokers and consultants with large clients (1,000 or more employees) were optimistic about their firms’ growth potential, compared to only 31% of those with small and mid-size clients. 73% of all respondents expressed concerns about reductions in medical care driven by healthcare reform.
For benefits advisers working with large firms the top concerns were 1) keeping up with legislative developments, 2) maintaining/increasing top-line revenue growth, and 3) attracting and retaining clients.
Advisers for small and mid-size firms saw things a bit differently. They were most worried by 1) lower commissions due to adjustments to the medical loss ratio (which regulates the percentage of premium revenues that must be spent on claims), 2) maintaining/increasing top-line revenue growth, and 3) keeping up with legislative changes.
Dr. Ronald Leopold, Vice-President of MetLife’s US business, commented:
The convergence of economic issues and health care reform is reshaping the benefits landscape, and demanding agile navigational skills from brokers, consultants, and their clients alike. The key to growth for brokerage and consulting firms will be the ability to differentiate one’s self from the competition — a concern expressed by two-thirds of survey respondents.
MetLife broke respondents down into four separate “profiles” based on their strategies going forward:
- Core strivers will continue to focus on traditional benefits packages. They expect an increase in employer-paid packages such as dental and disability.
- Market expanders focus on medical and retirement products, primarily employer-paid. They intend to grow their business by offering new products and penetrating new geographic locations.
- Voluntary volumizers feel employer benefits are on the decline and therefore prefer to focus on voluntary strategies, particularly lucrative executive benefits packages.
- Confident consultants remain optimistic regarding both their client firms and the industry as a whole. They, too, see growth potential in voluntary products.
While the US health system is notoriously inefficient, international brokers may be able to learn valuable lessons from the American market. This will be especially valuable as certain countries (such as Australia) incentivize the purchase of private health insurance in order to ease the cost burdens on their public health systems.