Commercial brokerages continue their expansion into health & benefits

Commercial property and casualty insurance brokerages are continuing their expansion into the employee health and benefits space.

The business opportunity gained popularity over the past several years and shows no sign of abating. A variety of reasons explain the relatively newfound interest in employee health and benefits, including cross-selling opportunities, client retention and stickiness, and product diversification.

For Hub, the ‘opportunity recognized’ began in 2018 when the brokerage was examining the structure of its U.S. business. At the time, the brokerage was protecting hard assets. The most important asset in any business — its people — wasn’t the focus.

“It’s really a natural extension to be able to go into these businesses and say, ‘We’ve got you protected in case of catastrophe or crisis, let us help you with some of the more day-to-day issues that you deal with in your business,’” says Terri Botosan, Hub International Canada’s president of employee benefits, retirement and life. “That was the theory in our 2018 discussion…and quite honestly, it’s played out extremely well for us.”

Hub created ‘coverage placemats’ that can be physically placed in front of a client to showcase the universe of insurance offerings. It allows a holistic view of risk and highlights these ‘adjacent businesses’ to clients. The concept recognizes there are different decision-makers for different types of insurance, Botosan says.

With an existing client, word of mouth can also create sales opportunities. “When you’ve got somebody inside your firm saying, ‘This company is doing a really good job for me,’ it’s a nice, warm lead,” she says.

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Commercial P&C brokerages’ expansion into employee health and benefits creates a win-win-win scenario for brokerages, employees and clients, Botosan says.

For example, brokerages can expand their client base and offer more than one product to the same client.

Consultants or advisors, who often perceive an ownership stake in a client, can deepen relationships with their colleagues by introducing a like-minded professional to a client. “We’ve really been able to create a community inside our own firm to introduce these professionals to each other to make sure that we’re putting the best foot forward and that we’re able to take care of these customers,” Botosan adds.

And clients gain ease of access to their insurance products through a one-stop shop experience.

Having more than one product with a customer also creates stickiness, Botosan says. Selling multiple products to the same client can help the brokerage, too. For example, if there’s an issue with one line of business, the brokerage may get a little grace with the client because they have multiple products through the brokerage.

There are some lines of business of particular interest to clients in the health and benefits space.

The space covers various products such as health insurance, group registered retirement savings plans (RRSPs) and pension plans, to name a few. Botosan says group benefits “are more of a standard expected offer” for larger clients; there isn’t the same prevalence of group RRSPs or pension plans for small- to mid-size clients.

“But we’re seeing that change really quickly,” she says. “We’re really seeing businesses shift.”

Botosan also expects the trend of commercial P&C brokerages expanding into health and life insurance to continue. “I think that it’s a good marriage,” she says.

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.