With the deluge of changes in the functioning of the market and the new role of benefit marketplaces (aka private exchanges), most brokers feel they are stuck between a rock and a hard place. They know that they want to make the shift to exchanges, but are not yet certain how the move will benefit them. Moreover, brokers are concerned about differentiating themselves in an increasingly competitive private exchange market. Are you facing a similar challenge? We have an answer for you.
During our hCentive xChange conference, broker attendees participated in a roundtable discussion on how they collectively planned to achieve differentiation on the marketplace, and this is what we learned.
1) Almost all brokers are harrowed by the benefit marketplace experience – For most brokers, moving to an exchange is disastrous. Almost all of their peers are suffering from early jitters of transition, but at the same time, they are very optimistic about the move to the platform. Most brokers felt that the change in marketplace is similar to the Medicare Part D ruckus, in the sense that it will get better with time.
2) Individual Market will be more competitive compared to Group Market – Compared to the group market, the individual market will be more challenging and rewarding for brokers. More choice would mean more customers, and a larger chance for brokers to differentiate from their competition and tailor offerings that get them a bigger share of market.
3) Benefit Marketplaces will be influenced by the performance of Public Exchanges – Over time, public exchanges will be laying the path for benefit marketplaces to tread upon. Currently, public exchanges have a higher share of enrollments, but benefit marketplaces are expected to take over by 2018. Public exchanges are the torchbearers for the market, and they are expected to ease the enrollment process for everyone and ensure that the risk pools are maintained in the private exchange market.
4) Brokers will have a continuing role in shaping the private exchange market – Continuing in the footsteps of public exchanges, private exchanges will thrive and grab their share. In this environment, brokers will have a role to play, and contrary to the fear, will not fade away or become obsolete. In fact, brokers will have a bigger role to play, especially in educating their buyers and helping them make the perfect decision by sifting through available plans and finding ones that best meet their family’s needs. From a knowledge standpoint, a broker’s role in inimitable and irreplaceable.
5) Communication and Engagement will be key – As private exchanges prevail, brokers will have to rethink their strategy and phase it around communication and customer engagement. Follow ups and engagement tools will hold primary importance as customers will be expecting next-level interaction with their brokers.
6) Adaption will be imperative to success in private exchange market – Almost all participating brokers agreed that adapting would be crucial if brokers do not want to be rendered useless in the private exchange market. Brokers don’t need to worry about cuts in their commission, but should rather focus on providing new lines of products and more choice to their customers. Communication and engagement will supplement their new offerings and changing stance toward customers.
The key to differentiation, as concluded in our breakout session, lies in mutating with the private exchange setup and supplementing broker offerings through value adding tools. In a final note, brokers have a great role to play in the future of private exchanges and to have a piece of that cake, evolution of their services and technology will be the answer.