17 Jul Five Tips for Savvy Businesses to Keep Brokers Straight
Are you receiving the best advice and maximum value from your broker? Today’s best advisors in the employee benefits industry serve as guides, helping their clients navigate through new health care mandates and long-term affordability issues.
A good broker knows which insurers are best for all lines of coverage, obtains multiple quotes, and provides plan design options and risk-sharing ideas. A broker must understand each insurance carrier’s contractual language and how even minor changes can affect your plan provisions and costs.
These five tips can help you to determine if you’re working with someone who truly cares about your business, your financial situation and your future.
- Make sure your broker is an employee benefits professional with a significant amount of coverage placements. Insurance carriers tend to give the best deals to trusted advisors who have long-standing business relationships.
- Ask your broker to confirm his or her total commission, including additional carrier bonuses. Sometimes this total compensation may deter your broker from recommending other more competitive options.
- Consider whether or not your broker is overpaid for services provided. Some brokers only show up at annual renewal. Other brokers are available to support employers and employees throughout the year.
- Take a close look at the year-to-year growth in your broker’s total compensation. Brokers receive a commission percentage increase that compounds at the same rate as your annual premium increases. Over the past five years, most brokers have seen more than a 50 percent increase in commission revenue, far outpacing CPI.
- Explore the options of compensating your broker on a fee basis or requesting a reduction in commission percentage. Most brokers will consider a reduction in their commission percentage as an alternative to losing a client.
Remember, insurance agents and brokers are required to be licensed by the California Department of Insurance. Top-notch advisors offer the expertise and resources to help your business thrive during these challenging times.