Like many things in life – mortgages, car leases, Spotify memberships – after a period of time you have to renew your contract. The same rules apply for group insurance.
If only group benefits renewals were as easy as clicking “Agree” to another year of Spotify Premium®! However, they are not too complex once you know what you are looking for.
Factors Influencing Renewals
Every time a new group is placed with Benefits by Design (BBD) Inc., the group is guaranteed their quoted rates for a certain length of time. This is known as a rate guarantee. Rate guarantees vary depending on the benefit and are reviewed at a group’s first renewal.
Renewals are completed annually and are required to ensure a group plan is being properly funded based on their usage and demographic makeup. At time of renewal, BBD evaluates both the claims experience of a group, trend and inflation, as well as demographics including age, gender, occupations, and salary.
There is a four month lag time from when a group’s renewal period ends, to when the renewal rates are implemented. This time allows:
- BBD to analyze and prepare the renewals;
- BBD to supply the renewals to advisors;
- Advisors to present the renewals to their clients; and
- Advisors to review plan design and for negotiations.
Renewals are always provided a minimum of 60 days prior to the client’s renewal date directly to advisors.
Presenting Your Renewals
As an Advisor, one of the most important conversations you’ll have with a group is the renewal conversation. With over 20 years in the group benefits industry, here are three of our tried and tested tips to navigate the renewal conversation:
Tip #1: Keep it simple.
There is a lot of information given at renewal. One of the best tips we’ve been told is to present the most relevant information – don’t overload your client with data and statistics if it won’t be helpful to the decision making process.
Tip #2: Have options.
Renewals are tricky to navigate. If a group is not pleased with their current benefits plan, an increase in rates at renewal makes it easy to switch carriers. A lot of the time, groups may not fully understand the benefits they have available to them and the options that exist to take some pressure off of their current plan. Educate your group on their options – make sure they’re aware that they can make changes to the betterment of their plan overall.
Tip #3: Add value beyond price.
Sometimes, the rates at renewals are just not what we’re hoping for. It can feel like the only solution is to take a group to market but don’t forget there are many other ways to bring value to an existing group benefits plan. For instance, excellent customer service can be a huge differentiator in keeping a group with an existing benefits provider. Or, a bundled service that is being well used (for instance a telehealth platform) could be the catalyst to keep a group where they are too.
These are just three ideas to help navigate the renewal process, but there are many more! Want to hear from other Advisors about how they conduct their renewals? Looking to learn more about BBD’s renewal process? Join our Underwriting Team for this complimentary webinar on Tuesday, July 17, 2018 at 2:00 PM EST (11:00 AM PST).