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Brokers: How to Compete Against Online Health Insurance Companies

Quick look: As competition for insurance services from tech companies like Amazon continues to intensify, brokers can protect their books and gain a competitive edge by leaning into the things that aren’t available for purchase online: personalized attention, expert advisory services, and partnership with the HR experts at a professional employer organization (PEO).

The insurance landscape is undergoing dramatic shifts with pressure increasing on all sides. In addition to competing against other advisers and insurance groups, brokers are now facing competition from a totally new source: technology companies. These “insurtech” firms have an edge in certain areas like big data collection and the efficiency that accompanies technology. But brokers still have a few advantages insurtech firms can’t touch.

As a broker, here’s how you can compete against the rising threat of online health insurance companies to protect your book of business and build stronger client relationships.

Competition on multiple fronts

Today’s top technology companies are taking a seat at the insurance table. Though they have no historical ties to insurance, leading tech companies are seeing an opportunity to leverage the massive amounts of data they collect as well as deliver on modern consumers’ appetite for instant gratification. 

Customers who are used to the ease of online shopping and the ability to “buy now” are beginning to get accustomed to the idea of a streamlined, tech-forward insurance process. Per a recent survey, 55% of consumers would be interested in buying a hypothetical insurance product from Amazon over traditional insurance carriers. Amazon tentatively entered the health insurance space with Amazon Haven in 2018 and has revamped its offering today with Amazon Care.

Companies like Amazon and Google thrive on disrupting old delivery models, while other tech companies are also taking a piece of the pie. These emerging threats mean brokers need to remain educated, aware, and ready to take proactive action.

How brokers can get a leg up

Insurtechs may have a lead on data collection and analysis, but there is one crucial area where technology simply cannot compete: personalized service.

Navigating health insurance administration and plan selection is tricky for most small- and medium-sized businesses (SMBs). Health insurance continues to be the most important benefit for employees—and the most expensive for employers. Choosing a plan that costs too much or doesn’t align with employees’ needs risks wasting valuable resources most SMBs simply can’t afford.  

This is where you can seize the upper hand. Help your clients move safely through the health insurance gauntlet by answering questions, providing detailed plan information, generating apples-to-apples plan comparisons, and helping SMBs tailor health plans to match what matters to their employees. While insurtechs offer a promise of “streamlined efficiency,” SMB leaders value the truly personalized attention and real-time availability only a broker can offer.

Working with a PEO can alleviate the heavy lifting

Fending off competition from insurtechs doesn’t always require brokers to double their workloads. Encouraging SMBs to partner with a customer-service-focused professional employer organization (PEO) enables brokers to provide additional value that no level of Prime membership can match.

When a small business partners with a PEO, the PEO becomes the employer of record, immediately catapulting the business into a category of preferred insurance premium pricing they could never achieve on their own. Under the PEO’s group pricing plans, SMBs can offer more robust health insurance packages, often for the same—or sometimes less—than they were paying on their own.

By bringing on the HR experts at a PEO, brokers also relieve themselves of time-consuming day-to-day HR management tasks and can instead focus on growing their book of business. A reputable PEO will not compete with brokers. At ExtensisHR, we have implemented an industry-leading, broker-centric business model that protects brokers’ hard-earned relationships with clients.

Beyond insurance

Every broker knows that the service you provide stretches well beyond the limits of insurance. You’re probably also helping with many other HR-related tasks, such as Learning & Development (L&D), recruiting, and compliance management—in addition to answering questions and coordinating employee enrollment.

PEOs like ExtensisHR provide a huge range of valuable HR-related services, allowing you to offload these time-consuming responsibilities to HR experts. PEO companies deliver a massive amount of added value to an SMB’s HR department, such as L&D resources and career pathing, Diversity, Equity, and Inclusion (DEI) strategies, recruiting support, employee training programs, compliance management, risk management, tailored benefits packages, and development of overall HR strategies—in addition to day-to-day responsibilities like payroll and tax administration.

The overall efficiency of a PEO partnership delivers value that surpasses cost savings—companies that partner with a PEO are more successful than those that don’t. Some reports have revealed that small businesses working with a PEO grow 7-9% faster and are 50% less likely to go out of business.

Stay ahead of a shifting landscape

Insurtech companies are here to stay. For every major technology company getting into the insurance space, there are a handful of smaller startups also looking to break in. But at their core, insurance, benefits, and HR management are most successful when centered around relationships. As a broker, you can leverage the power of personalized attention and tailored solutions—an advantage no technology solution can touch.

Contact ExtensisHR today to see how our broker-centric business model helps you and your clients succeed.

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