Growing complexity within the employee benefits space, along with various economic developments, will offer benefit brokers and advisers tremendous growth opportunities in the future, new LIMRA research suggests.
Nearly 60% of employers expect to have a greater reliance on brokers over the next five years, according to
"If there were more 'spreadsheeting' benefits in the past, it's more consultative now in the future," Bryan Hodgens, senior vice president and head of LIMRA Research, said during a recent webinar to explain the research findings.
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He noted that the traditional role of the benefits broker is evolving from helping employers select which benefits to offer and the carrier best suited to provide them to other areas. Their focus is now shifting to helping employers comply with changing regulations and navigate digital capabilities while assuming a more of a consultative role.
Cost-driven choices
Most employers (79%) surveyed by LIMRA said they use brokers or advisers to help them identify, evaluate and
As many as 70% of respondents indicated that cost has a significant impact on their employee benefit strategy. More than half have negotiated with providers for better
Several major factors are influencing the workplace benefits ecosystem and distribution strategies used to connect workers to the coverages they need. One standout is a fairly robust U.S. economy punctuated by equity market growth, a solid job market, relatively low unemployment and favorable gross domestic product, Ron Neyer, associate research director for the LIMRA Workplace Benefits Research, noted during the webinar.
"When you have a strong and healthy business environment, that gives employers confidence," he said. In reinvesting profits to expand businesses, he added that it accompanies a need to recruit more workers and invest in their benefits package.
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Amid all this good news, however, Neyer noted that inflation has remained high for a sustained period of time, and with some economic forecasts suggesting lower growth rates and even the possibility of a recession, employers may pull back a bit. If employees become less comfortable and worry about potentially losing their job, he suggested they will be less willing to purchase benefits.
Given the growing complexity of
He noted that while rare, some carriers have worked directly with HR departments or other key decisionmakers, bypassing the broker. A similar avenue involves
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Neyer believes employers will continue to demand more out of their brokers, who in turn, will need to stay on top of key industry trends. Noting that benefits decision-making is no longer just an HR function, especially with growing economic pressure, he said the C-suite is now heavily involved in helping shape benefits.
"I think employers are also looking for a lot more data-driven insights and justifications to satisfy the C-suite and balance their budget," he added.
