Brokers Gain Edge, Help Clients Through Partnerships

Insurance brokers are recognizing the benefit of offering their customers one-stop shopping. Brokers across the greater San Fernando Valley say they are forging professional service partnerships to offer clients a helping hand and to win them over in an increasingly competitive industry. They are aligning themselves with human resources experts, lawyers, physicians, safety experts and others. “It’s becoming more widespread where people are expanding their offerings,” said David Benson, legislative chair and past president for the Los Angeles Association of Health Underwriters. “You try to differentiate yourself by bringing different things to the table.” Just last month, Arroyo Insurance Services in Sherman Oaks signed a contract with MyPaperLessOffice, a company that offers an online human resources integrated system that helps employers keep track of employment data, said Ross Pendergraft, vice president of Arroyo’s Sherman Oaks office. Arroyo – which specializes in commercial lines, benefits, personal lines and financial services – has essentially become a reseller of the product, Pendergraft said. The relationship has enabled the firm to provide the technology to its clients for little to no cost, he said. One of Arroyo’s clients, National Wire & Cable Corporation in Los Angeles, has in interest in using the MyPaperLessOffice system to make document filing easier. “This would help in tracking all of the paperwork that’s involved,” said Carmen Miranda, the company’s vice president of human resources. “This is just adding another module of the five-star services that they do provide.” Human resources Competition among health benefits brokers has been heating up in recent years because there are fewer insurance carriers today to choose from, and competition is even stiffer in the small group benefits market, said Benson, who also headed up the California Association of Health Under- writers. Brokers today charge customers similar rates – and earn similar commissions – for their services and need something else to set them apart, Benson said. RGEB Employee Benefits in Woodland Hills is in the process of formalizing a partnership with a local human resources company that it’s known for years. RGEB officials declined to name the human resources company, pending a final deal. “We handle about 300 companies, including about 7,000 employees, and so a lot of our clients have needs that are not just group health insurance or group dental,” said Barry Cohn, RGEB’s president and CEO. Cohn said he anticipates the partnership will bring new business to RGEB, while better serving clients’ needs. Through the agreement, the two partner companies are expected to refer some of their top clients to each other for business, Cohn said. Employee benefits brokers are looking to add services with fewer in-house costs, Benson said. They know their commissions could be cut by carriers that are being forced to comply with new health care reform standards, which call for less money spent on administrative functions, he said. “We can get by with smaller commissions, but the problem is our support staff,” Benson said. “We’re going to have to reduce our support staff.” Other services For about a year and a half, Woodland Hills-based Leavitt Insurance Services of Los Angeles has been contracting with a medical physician who provides employee wellness program consulting, said Cathy Janowski, benefits manager for the firm. “It lends a lot of interest and credibility to the group when a medical doctor is involved,” she said. The local Leavitt office also hired an outside attorney in recent years to advise clients on benefits-related tax filings, legal compliance and other issues. With demand increasing for the legal services, the company also added an in-house attorney about six months ago. “With the advent of health care reform, it’s just a lot more complicated, and you need your expertise around,” Janowski said. The economic downturn has likely pushed more brokers to partner-up, said Danone Simpson, president and CEO of Danone Simpson Insurance Services LLC, based in Woodland Hills. “The property and casualty market is soft, and when the market is soft, prices lower and it’s more competitive,” Simpson said. “People have to offer more and work harder.” Simpson has been using outside experts since she started the company five years ago. The brokerage company specializes in employee benefits, workers compensation, property and casualty and professional liability. Simpson said her company partners with loss control experts to help clients prepare “business continuation” programs, or plans that help employers keep their businesses running in case disaster strikes or there’s a change in company leadership. Crest Digital in Los Angeles benefited from that partnership, said Gerry Schauer, the company’s chief financial officer. Having simultaneous access to Simpson’s brokers and loss control experts helped Crest Digital to lower its insurance policy valuation by about 10 percent, Schauer said. “It also helped us when we applied for insurance and the carriers came out,” he said. “Having that (plan) pre-prepared was very helpful in making the subsequent audit by the insurance carrier go smoothly.”