Adding value: By offering free enhancements to work-site products, insurers can see sales grow. (Work-Site Marketing: Life/Health).

Work-site marketing appears to be finally turning the corner on sales after being around for 30 years. In 2001, work-site sales increased 13% over 2000, and 2000 sales were up 19% over 1999, according to Eastbridge Consulting Group, a marketing advisory firm based in Avon, Conn. Between 1997 and 2001, work-site sales grew a remarkable 75%.

Initially, individual products, specifically life insurance, dominated the workplace. Today, however, both individual and group products are prevalent in work-site sales, with group products showing faster growth. In 2001, group products represented 37% of total sales, an increase of 26% over the prior year. Individual sales rose only 6%. And today, while life insurance is still the leading product sold, the fastest growing products at the work site are the most recently introduced: long-term care grew by 77% in 2001, and cancer and critical illness grew by 17%.

Work-site sales will continue to increase. "Employees are turning to the workplace for a broad array of insurance and investment products, with younger employees leading the pack in workplace purchases," according to the recently released 2002 MetLife Study of Employee Benefit Trends. The study found that more than three in five, or 61%, of employees surveyed cited interest in purchasing a variety of products at work. Significant, too, is the study's finding that employers' three most important benefit objectives--employee retention, benefit cost reduction and work/life balance--lend themselves to voluntary products.

Differentiation Is Key

Traditionally, sellers are looking for insurance companies to provide new products, or new product designs, that will open doors to new prospects and/or offer a fresh reason to pay a visit to current clients. In the work-site arena, modifications to existing products and adding new products to a company's work-site marketing platform have characterized differentiation for most carriers.

Today, however, the industry is witnessing a new and serious effort at differentiation. It is called embedding, and it involves adding or partnering non-insurance services, such as emergency medical and travel assistance and work and family life services with existing products--at no cost to the insured.

As an example, an emergency medical and travel assistance plan provides a number of services to covered members who are traveling more than 100 miles from home. These services include, but are not limited to, hospital admission guarantee, medical consultation and evaluation, emergency evacuation and prescription medication assistance. In one case, this plan is included at no charge with a voluntary long-term disability policy of a major work-site carrier and it's under consideration by others.

Other companies are in the process of offering a work and family life advisory plan, also at no additional charge. These plans are sometimes called second-generation employee assistance plans. They differ from the original EAPs in that they cover virtually any issue an employee might have to deal with that could result in lost productivity. For instance, these plans offer eldercare counseling services that help employers minimize downtime, maintain the productivity of employees who are faced with eldercare issues and retain these employees. Also significant in these plans is the availability of the service not only to employees, but to their spouses, their parents and their spouses' parents.

While eldercare is the key benefit of work and family life plans, these plans also offer other services that are designed to help employees balance their work and personal lives, such as legal guidance, personal financial counseling, child-care/parenting services, personal and family counseling, and substance abuse and addiction counseling. Given the finding of the MetLife study that work/life balance continues to be one of the benefits strategies employers rate as most important, it is not surprising that services such as this are being embedded in work-site offerings.

Consolidated Billing

A nonembedded, but recent, addition to the new differentiating strategies, is the availability of consolidated billing. Employers offer a variety of products to their employees via work-site selling, and the products are often provided by different carriers. It is not uncommon for an employer to offer five different products, from five different insurance companies, to his or her employees. The employer receives five separate bills each month, one from each insurance company, and must make deductions from employees' paychecks for multiple premiums, reconcile the deductions against the bills from the insurance companies, and remit a separate payment to each insurer. Depending upon the employer's size and sophistication, additional personnel may be required to perform this administrative function.

The consolidated billing company resolves this administrative problem for the employer. Consolidating all bills from the insurance companies means the employer receives one bill and submits one check to the consolidated billing company. The employer no longer receives five separate bills as in the foregoing example and is relieved of the reconciliation and payment process. The end result: the employer saves time and money, and the insurance sales person is free to add additional products with no resistance from the employer based on administrative issues.

Signing Up Online

The Internet has revolutionized the way American consumers conduct both their business and personal lives. Thus, the impact of the Internet on work-site marketing seems to be inevitable.

The conventional voluntary-benefits enrollment process, which uses professional enrollment specialists to conduct group or individual meetings at the work site, has been and continues to be a significant differentiating factor, one that has been successful because employees appreciate the personal touch the specialists offer that translates into premium dollars.

Probably the key value-added factor in work-site sales is enrollment, and there is a trend toward the increasing availability of enrollment assistance by carriers and large brokerage houses, not to mention the growth of independent enrollment companies.

The Internet has not yet had a significant impact on the work-site marketing enrollment process. There is emerging technology, however, that has successfully made its way into the bank and credit-union markets. It is making insurance available to bank customers and credit-union members via the Internet in a manner that is much like the work-site enrollment process. Its early success in these markets is being attributed to translating the human touch to technology.

A potential customer goes online and is greeted by a personable, articulate virtual enroller, capable of walking the customer through the enrollment process, answering questions and speaking with the customer via a toll-free telephone number if further assistance is needed or preferred. This human touch is maintained throughout the enrollment process, backed up by 24/7/365 customer service via regular telephone or Web contact.

Internet enrollment will become a key factor in the work-site business when the problem of driving employees to the Internet to enroll is solved. Right now, face-to-face contact remains critical to successful enrollments, and it is a key differentiating factor for those companies offering their distributors enrollment assistance.

The bottom line: Differentiation is taking on a new face as insurance companies investigate new ways to make themselves stand Out with distributors and their customers, and show a willingness to partner with providers of specialty services to enhance their product offerings.

James M. Ouimet is chairman and chief executive officer of The James Group L.L.C. and serves on the board of the National Association of Professional Enrollment Specialists/Enrollment Specialists International. This article is based on his presentation at the annual meeting of the Professional Insurance Marketing Association.