4 Reasons an Insurance Broker Saves Your Organization Time and Money
Why does my company need an insurance broker? It’s the pivotal question in our line of business, but the answer is variable, greatly impacted by vertical, organizational structure, and business objectives — not to mention the approach of the specific brokerage. There is no one-size-fits-all value proposition, though after eight years at Allegiant (and many more in the business), I can confidently identify the ways our team saves clients time and money. But before I share some of those, here’s my general answer to the initial question.
Who needs an insurance broker?
There are myriad reasons an insurance broker can be an asset to your organization, but the main drivers for seeking out a broker often come down to one (or more) of the following:
Lack of knowledge. Without an insurance expert on your team, it can be extremely difficult to fully comprehend, let alone optimize, insurance policies.
Lack of time. Even with an experienced team member at the helm, comparing quotes, policies, and coverage takes time many organizations just don’t have.
Tight budgets. With many feeling the effects of the recession, saving money is a top priority. But lowering the cost of insurance — without sacrificing coverage — is a challenging tightrope to walk.
Unique needs. Determining the appropriate insurance coverage can be a challenge in the most straightforward of circumstances, and it’s even more complicated for global organizations with a diverse range of employee populations.
Now, let’s take a closer look at four ways the right broker can overcome these challenges.
1. Industry insight from insurance insiders
Insurance is an inherently opaque industry, putting businesses and individuals outside the insurance ecosystem at a distinct disadvantage. Many carriers “educate” clients based on their own best interest, and in so doing justify unnecessary or additional expenses. But with a strong insurance broker at your side, you gain access to objective knowledge at a workable level without the influence of carrier bias. No internal insurance expertise is required for a broker to evaluate, recalculate, and compare your policies to industry benchmarks.
Insurance brokers also have the benefit of a big-picture perspective. We know how to optimize relationships based on volume and coverage needs, ensuring clients are getting the right coverage at the best possible price. I’ve seen clients come to us with annual insurance costs in the multi-millions, and within fifteen minutes, our team has found areas of improvement capable of significantly reducing costs.
2. Demonstrated underwriting methodology
Hand-in-hand with industry insight is the demonstrated underwriting methodology a good insurance broker brings to the table.
Take incurred claims, for example. Incurred claims are the sum of the insurance claims submitted by providers and reimbursed by the insurance carrier plus the estimated claims that have been “incurred” but not yet processed. The longer the period between the incurred event and payment, the higher the incurred claims. At Allegiant, we routinely investigate this claim estimation to ensure our clients aren’t overpaying. We then aggregate this information and cross-pollinate the findings throughout our network to keep carriers honest and make sure all our clients are getting the best possible rates.
3. Actionable advice for the insurance renewal process
Your insurance renewal period is like an annual physical for your healthcare plan; it’s the time to address any long-term issues, identify areas of improvement, and ensure everything is in working order. Unfortunately, not all carriers are great physicians — especially if you’ve been with them for a long time.
An insurance broker can act as an advocate for the health of your organization’s insurance coverage, knowing when and how to dispense actionable advice like:
Don’t entertain plan or product concessions until you’ve negotiated the lowest price.
Don’t accept a premium increase higher than the trend rate.
Don’t switch carriers unless you’re saving at least 15-20%.
Speaking of switching carriers, an insurance broker can also help determine if the expense of finding a new carrier is warranted or if it’s possible to fix the issues with the existing carrier — saving time and money. Check out my post on the most important questions to ask during health insurance renewals for more.
4. A dedicated team of insurance experts at your service
Allegiant is a small broker, and that’s one of our biggest benefits. Why? Because a small team fosters a more personal, empathetic environment. Our experienced team of SOLVERs goes to bat for our clients every day, often working around the clock and across time zones to help global organizations achieve their missions. We take great pride in treating every case like we’re the ones writing the check. We’re also not hemmed in by arbitrary restrictions; the only business “rule” we have is to get our clients the best possible coverage, even if that means we make less money.
When we’re not helping clients secure better benefits and lower costs, we’re working to make insurance more equitable and accessible. Check out the wide range of webinars, podcast episodes, and resources on the Allegiant Insights blog to learn more about our mission, approach, and solutions.