Selling creative ASOemployee benefit solutions to your best prospects

Robert J. Crowder CLU, GBAPresident

May 2012

Goals/Objectives for Today

You will have a better understanding of:

The right questions to ask your prospects

How the insurance environment is changing

Selling a commodity vs. customized solution

ASO plan design flexibility

Present Employee Benefits Environment

COSTS

SUPPLIERS

MARKET

Clients often become dissatisfied with a benefits relationship because they don’t understand it.

Think premiums are too high

Cost increases every year!

We have to have benefits

Plan doesn’t cover

what I need

Voodoo insurance company

math

Fact: Few insurance companies are controlling 80%+ of the small case marketplace

Arguably: The insurance industry has turned small employee benefit plans into a commodity

The only difference in the offerings between various insurance companies is the colour of the letterhead … and price IMO

So what is your choice?

GWL

Manulife

Sun Life

Empire

DFS

Standard

Stop … I want to get off!

So what is your choice?

Don’t sell a commodity,

…sell a customized solution

How?

To sell a customized solution, you need the tools to do so…

You need an ASO solution

A benefits plan is a promise made by the employer to the employees

How will that promise be defined?

Parts of the promise

C L I E N T R I S K L I N E

BILL PAYMENTS

Low Inflation

High Inflation

INSURANCELife Insurance, AD&D CI Out of Country

Long Term Disability Extended Health Care(Claims over $5,000)

Dental Care

Short Term Disability Extended Health Care(Claims under $5,000)

requiresinsurance

requiresadministration

services

High CostLow Freq

Low CostHigh Freq

Traditional Funding vs. A.S.O. Funding

Risk charges Risk charges

+ +

Anticipated claims “GAP” Your actual

claims + +

Plan operation expenses

Plan operation expenses

= =

Your premiums Your costs

www.thebenefitstrust.com

BILL PAYMENTS

INSURANCEThis portion of the benefits plan should be designed according

to YOUR CLIENTS’ needs, instead of just a standard

insurance package.

This portion of the benefits plan should be designed according

to YOUR CLIENTS’ needs, instead of just a standard

insurance package.

Owners and Executives should receive 100% benefits

$1,000 in non-eligible claim costs require $2,000 in after tax money

No double administration

Plan Sponsor

Employee’s CRA

eligible expenses

Unused Account Balances can be carried forward into the next benefit year

$

Health Care Spending Accounts

$$$

Part of the benefit promise

The Benefits Trust Process

Monthly Account Balances ($)YTD Account Balances ($)

Insurance PremiumsLife, AD&D, LTD, Stop Loss,Critical Illness, Out of Country

Claim Transactions Health, Dental, STD

Plan Operation CostsAdministration, Producer Compensation, Taxes

MonthlyContribution

$

$

$

No Surprises

Who is an Ideal Prospect?

Profitable Company

Owner/OperatedUnique Benefit Requirement

1 to 50 employees

How do sell a customized solution?

Start having different conversations with your clients.

…ask different questions

…What is your compensation philosophy?

…What are the groups within your group?

…What is unique about your company?

It’s question time…

Answers to these questions (and others) will

help you to guide your client to their customized employee benefit solution.

What is your compensation philosophy?

8 lives, new case, no prior coverage

•7 Executives (base salary $150,000+)

•1 employee

•International green power consulting

Philosophy: The best of the best.

Offer: “We will always find you the cheapest price”

The customized solution

•$500,000 of AD&D Coverage

•$250,000 of Business Accident Coverage

•$25,000 of Critical Illness coverage

•Out of Country Emergency Medical Coverage

•$5,000 Stop loss coverage

•100% EHC and Dental coverage with no limits, caps, or maximums. Expenses must meet CRA definition.

•Budgeted contributions, monthly statements

The result

•Appointed on the case

•Larger than average premiums, and larger than average commissions

•Plan has been put in a drawer, and client has happily moved on to key business issues

•Hang up on your prospecting calls

What are the groups within your group?15 life case

•2 owners

•1 key staff member

•3 important employees

•9 employees

Existing plan: off the shelf 80% plan for everyone, increasing annually, moved twice in 5 years

The customized solution15 life case

•Same pooled benefits as previous plan

•Owners and key employee: 100% EHC and Dental coverage

•Important employees: 85% EHC and Dental coverage

•All other employees: 80% Core pay-direct drug plan and HCSA based on years of service

The result

•No more client frustration

•Increase in overall premium, and increase in commissions

•10 minute renewal

•Owner hangs up on your prospecting calls

What is unique about your company?45 life case

•Distinct and unique culture

•Employee empowerment

•Individual responsibility

•Owner office red mug - green mug policy

Existing plan: conventional design with no employee choice

The customized solutionCore Insurance, with Health Care Spending Account and Group RRSP plans complementing each other

Employee-Paid Mandatory Benefits

$500 per year

Employee Contribution Mandatory

2.0% per year

+Employer promise 5% of salary

Choice of HCSA dollars

Choice of

GRRSP dollars

Voluntary GRRSP contributions

And/or

Life, AD&D, CI, OOC, Stop Loss

The result

•One budget decision made annually by the client

•Employees each make decisions about the future

•Fits with culture

•Increase in premiums, and increase in commissions

•Hang up on your prospecting calls

Ask the questions…

Remind the client of the questions

and their answers

Get off the treadmill …

• Sell customized solutions

• Increase profitability in your benefits block

• Take three steps forward

The Benefits Trust SystemTM

Monthly Account Balances ($)YTD Account Balances ($)

Insurance PremiumsLife, AD&D, LTD, Stop Loss,Critical Illness, Out of Country

Claim Transactions Health, Dental, STD

Plan Operation CostsAdministration, Producer Compensation, Taxes

MonthlyContribution

$

$

$

Thanks for your time

Questions?

www.thebenefitstrust.com