P&C insurance brokers specializing in statutory and employee benefits may have been dismayed by the number of companies – especially in the hospitality sector – that went out of business in 2020. Insurance cancellations may have caused a loss in revenue at a time when it was harder to generate new business when you couldn’t meet with clients face to face during the pandemic.
Our proprietary Broker Dashboard: Net Revenue Tracker allows us to track and monitor details like this to help brokers retain clients and grow their book of business.
However, new research shows that new business opportunities may not be as scarce as the insurance community had perceived. In fact, research from the University of Maryland economist John Haltiwanger showed that more new businesses opened in 2020 than they have at other times, Axios reported.
The Wall Street Journal reported that, during the pandemic, for every five stores that closed permanently in one Chicago neighborhood, 10 opened. While many of the new small businesses are e-commerce websites or “non-store retailers,” other sectors showing growth are restaurants, laundromats, and trucking companies, Axios reported.
How Does This Affect Statutory Insurance Brokers?
Currently, five U.S. states plus Puerto Rico mandate statutory disability benefits for employees. Hawaii, New Jersey, and New York offer options to privatize these employee benefits.
New business owners may not be aware that every full-time and many part-time employees require short-term disability coverage in accordance with the legislation for their state – even if the employee works out-of-state.
For instance, if a Wisconsin resident works remotely as a W-2 employee (not in independent contractor) for an e-commerce site based in New Jersey, the employer would be responsible for providing statutory disability and Family Leave Insurance (FLI) benefits to that worker.
Although many digital companies opt to work with independent contractors to simplify payroll and avoid these benefits, along with gaining flexibility and scalability in their workforce, some will hire full-time employees in key roles. Chief marketing officers, content managers, web developers, and accountants often hold full-time roles in e-commerce companies.
Additionally, new brick-and-mortar business owners will need to be informed about their state’s laws for statutory disability and family leave benefits. They will need to work with insurance brokers they can trust to educate them on the laws and offer options to get white-glove, specialized service. Small business owners may not recognize the importance of ancillary benefits for recruiting and retention. In today’s tight labor market, employee benefits such as Group Life / AD&D, vision, dental, and long-term disability can set new businesses apart.
For brokers, it’s a matter of connecting with new business owners and becoming their trusted advisor when it comes to employee benefits.
Where to Find New Businesses
Statutory insurance is unique – and can be uniquely profitable – because you are selling business owners a benefit they need. However, they may not know where to find it or how to get the lowest rates. They may not know they can bundle ancillary benefits with disability insurance for lower rates. If they have already started writing their benefits through their state, they might be unhappy with the service but unaware that they have alternatives.
The first step toward growing your book of business is to find small business owners who need your help. Local networking groups remain a key source of leads, especially now that people are attending in-person business meetings and networking events again.
Here are a few other places to uncover leads:
- Check with your local Chamber of Commerce, which may provide business lists to their members.
- Connect with the Corporations Division of the Secretary of State for their online directory of registered corporations
- Search on Google for new businesses in specific industries
You can also use inbound marketing to attract new leads to you, by posting content on LinkedIn to connect with new business owners in your state.
Look Ahead, Reach Out, Deliver the Service Business Owners Expect
As we recover collectively from the effects of the past year and a half, it’s time to start looking ahead. The DBL Center makes it easy for you to deliver white-glove, personalized service and the lowest rates to your clients.