Years ago, I used to love to watch “Family Feud.” Mostly, I wondered how many of the female contestants Richard Dawson would kiss. I suspect that, in today’s PC word, he wouldn’t even take the chance.
Which brings me to a phone call I received last week. One of our carriers, with whom I’ve done business for almost 20 years, called to see why I wasn’t writing very much with them lately, and if there were things they could either do, or stop doing, which might entice me to place more of my business with them.
I’m always happy to talk with carriers about these issues. For one thing, it gives me an opportunity to vent to someone at the home office. For another, I’ve become concerned lately because I’ve been putting so much business with one carrier (not the one which called), and I really value my independence. So, if I can spread a little more of the business around, I’d be happier.
In any case, we discussed some of the issues which cause an agent to use Carrier A over Carrier B. Price is important, of course, but it’s only part of the mix. I have no problem suggesting to a client that they pick Carrier B, even though their rates are a bit higher, if they offer superior service, or easier underwriting, or better plans. But the rates do need to be competitive; as it stands, Carrier B is usually 15% to 20% higher than Carrier A for similar plans, and they are much more difficult in their underwriting. Their after-sale service is superb, but you have to get the case sold - and issued - first.
Another reason I’ve been using Carrier A so much is that, unlike Carrier B (the one which called), they offer 6 different underwriting classes, versus only 3 for Carrier B. And also unlike Carrier B, they don’t “rider” (exclude) conditions or benefits. That is, if Joe Shmo has had a knee replaced, Carrier A will charge him more, but won’t exclude the knee or medications. Carrier B, tho, will often do both: exclude the condition (at least for a year or two) AND charge a higher premium. I just don’t think that’s right.
You may have noticed one aspect of the sales situation which I haven’t mentioned: commissions. Truth be told, I often don’t even know what commissions are paid on which cases. Generally, the carriers all pay more or less the same amount. So that really hasn’t been a factor in my choices of where to place business.
All in all, it was an interesting conversation (at least from my end!). I’m looking forward to seeing what, if any, changes Carrier B makes in order to increase their market share.
It’ll be interesting to watch.
Like you, I have 2 carriers I gravitate toward. I am licensed with probably a dozen health carriers but have the majority of my business with only two.
ReplyDeleteMine are carrier B and K.
B (regrettably) gets probably 80% of my new business; K gets most of the remainder. (I still do a little business with other carriers, with the emphasis on "little").
B will take anyone who can fog a mirror. Their rates are competitive . . . initially . . . but then renewals are a pain in the backside. So are claims. They like to deny everything.
So why use them?
Everyone (thinks) they want this carrier because it is the 800# gorilla that all doctors accept. It is easy to get applications through underwriting . . . most are approved in 2 days.
In contrast, K takes 2 - 3 weeks to approve . . . sometimes longer. They turn down about 40% of the applicants. But I know their underwriting fairly well, so I rarely get a turn down . . . I just dont submit "dirty" business for consideration.
All my clients LOVE K, no one complains. Renewals are less than 10% per year.
K is competitive with B. K is an HMO, B is a PPO.
Most people would rather have a PPO than an HMO.
I understand that. But I also know that if my clients would just listen to me, they would be happier with K.
If it were up to me, no one would use B and everyone would use K.
Unfortunately the world, or at least my world, doesn't work that way.
It must be a perception thing. We've heard all these complaints about "evil HMOs," and we begin to believe that they're ALL bad.
ReplyDeleteTruth is, there are "good" HMOs and "bad" HMOs, just like there are "good" & "bad" PPOs, etc.
And I think at least a part of the problem is our cultural need for instant gratification: "Oh, a 30% rate increase? Well, that's next year. Right now I can save $xx"
And sure enough, next year rolls around, and the 30% (or more) renewal hits. 3 guesses as to the reaction then (and the first 2 don't count).
On a related note, K has a presence here in Ohio, but they're only in the Cleveland area, which doesn't help my clients.
U, another HMO similar to K, is a big dog here, but only sells group (and "free" MedSupp). I've always wondered what would happen to B's market share if U ever came thru with an individual plan.
As always, I appreciate your insights ;-))
Sounds like you need to do more work in Cleveland . . .
ReplyDeleteSounds like you need to do more work in Cleveland . . .
ReplyDelete