BEFORE YOU BUILD A BENEFITS PRACTICE

There is an important distinction between deciding to sell employee benefits and actually building an employee benefits practice.

For an established property and casualty agency, the opportunity can appear fairly straightforward. The agency already has relationships with business owners, an existing book of commercial clients, experienced producers and a familiarity with risk and insurance. From that perspective, adding employee benefits can look like a natural extension of what the agency is already doing: hire someone with benefits experience, introduce that person to the existing client base and begin generating a new stream of revenue.

After my first year working as an employee benefits producer inside an established practice, I have developed a much greater appreciation for how incomplete that view can be.

I grew up around the industry. My father has spent more than 25 years in employee benefits, so I was exposed to the business long before I began working in it myself. I heard about renewals, client relationships, producers, carrier negotiations and agency life for years. Even with that background, stepping into the role has shown me how much goes into a benefits practice long before anyone would call it successful. The expertise, processes and depth that look established from the outside were built slowly and behind the scenes.

If I were advising a P&C agency owner considering a move into benefits, I would encourage them to think beyond the question of how quickly they can begin selling. The more important question is what they want the practice to look like five, 10 or 15 years from now.

To me, that comes down primarily to two things: how the agency develops people and how it builds the operating structure behind them.

Build beyond the first hire

The most obvious place to start is talent. If I were building a benefits practice from scratch, I would want experienced people in the room from the beginning. Employee benefits is a technical business, and there is tremendous value in having people who understand plan design, funding arrangements, carrier relationships, compliance, implementation, enrollment and the many details that determine whether a client is ultimately served well.

I would likely begin with a strong technical or operations professional and pair that person with a producer who can build relationships, communicate well and create opportunities in the market. That combination gives the agency credibility on both sides of the client relationship: someone who can win the business and someone who can help deliver on what was promised.

Where I think agencies can make a mistake, however, is stopping there.

It is understandable that a new practice would prioritize immediate results. An agency is making an investment and wants to see revenue. Experienced hires can shorten the learning curve and help create momentum more quickly. But if the entire strategy is built around buying experience from the marketplace, the agency may solve today’s need without creating a sustainable pipeline for tomorrow.

The development of younger talent needs to begin early.

A new producer can learn the language of benefits fairly quickly. They can learn how deductibles, coinsurance, stop-loss, contribution strategies and funding arrangements work. They can study compliance requirements and become familiar with carrier markets. Those things matter, but technical knowledge alone does not make someone a strong advisor.

That takes repetition. It takes sitting in client meetings and listening to how an experienced advisor asks a difficult question. It takes watching someone navigate a disagreement with a CFO or help an HR leader work through a stressful implementation. It takes learning when to speak and when to listen, how to read a room, how to simplify a complicated issue and how to connect benefits strategy to the broader direction of a business.

Those skills develop over time, and there is no real substitute for the repetitions. That is why I believe agencies should think about development at the same time they think about production. “What did this producer generate this year?” is a necessary business question. But if the goal is to build a practice that will exist for decades, another question is just as important: “Who are we developing for five years from now?”

If the answer is nobody, the practice may eventually face a talent problem regardless of how successful the first few years appear.

Experience and talent are not the same thing

That longer-term view also shapes how I think about experience versus talent. Experience is invaluable in this business. A benefits professional who has spent 15 years working through difficult renewals, complex implementations, client conflicts and carrier negotiations has perspective that a younger producer simply cannot have yet. That experience should be used to establish standards, shorten the learning curve and help younger people avoid unnecessary mistakes.

But experience and talent are not interchangeable.

If I were making a long-term investment in a person, I would place tremendous value on curiosity, listening skills, judgment, work ethic, emotional intelligence and the ability to build trust. Those qualities are harder to develop than technical knowledge.

The technical side of benefits can be taught. Someone can learn plan design. They can learn compliance. They can learn the carrier market and the sales process. They can become more sophisticated in how they evaluate claims or structure a benefits program.

What is more difficult to teach is genuine curiosity about another person’s business. It is difficult to manufacture the ability to listen carefully, ask a thoughtful follow-up question, read a room or earn trust over time.

That is why I do not view the decision as experience or talent. A sustainable practice needs both. The experienced people should set the standard. The talented people coming behind them should be developed within that standard. When those two groups work together intentionally, the agency is not simply staffing a department; it is creating continuity.

That matters because if every stage of growth requires the agency to find another 15-year benefits veteran in the open market, it becomes dependent on a talent pool it cannot fully control. Developing people internally creates a much more durable path.

The producer is only part of the product

Talent development, however, is only one side of building a practice. The other is the operating engine behind the producer.

When I entered the business, I naturally thought a great deal about sales. How do I get meetings? How do I create opportunities? How do I win a broker-of-record relationship?

Those are important questions for any producer. What I have come to appreciate more is that the producer is only one part of what the client is buying. In many ways, the real product is the team behind the producer.

A producer can win an account by building trust, identifying a problem and presenting a compelling strategy. But once the client says yes, the quality of the experience is shaped by everything that happens afterward: implementation, enrollment, employee communication, technology, carrier relationships, claims issues, compliance, ongoing service and renewal preparation. If those pieces do not work, the strength of the original sales presentation eventually becomes irrelevant.

That is why I believe a P&C agency considering benefits should build the sales and service engines together. A producer can create momentum and opportunity, but the operation has to be ready to absorb that growth and deliver on the promise from the beginning.

A strong client manager, client executive or technical professional is not simply support staff for the producer. That person is part of the value the client is buying. In many cases, they are the ones turning the promises made during the sales process into the client’s actual day-to-day experience.

The work continues after renewal

The modern benefits business also requires more year-round engagement than it once did. A strong advisor should not disappear after renewal and return nine months later. Depending on the client’s size and funding arrangement, there may be opportunities throughout the year to review medical claims, pharmacy spend, utilization trends, paid and incurred claims or emerging diagnosis activity.

You can start selling benefits tomorrow.

Building a practice takes longer.

The goal is not to collect data for the sake of collecting it. The goal is to help the employer make better decisions before the next renewal forces the conversation. That could mean evaluating a plan design change, adjusting employee communication, addressing a growing area of pharmacy spend or introducing a targeted solution that better fits the needs of the employee population. All of that requires technical depth and service capacity. It also requires people who can interpret information, communicate it clearly and help an employer decide what to do next.

That is the difference between having someone who can sell benefits and having a benefits practice.

Build capability before chasing opportunity

This is also why I think an agency should be thoughtful about how quickly it approaches its existing commercial book. The natural temptation is to ask, “How many of our P&C clients can we cross-sell?” I would ask a different question first: “Do we have a benefits practice we are confident putting in front of our best clients?”

That changes the conversation.

A commercial producer may have spent years building a relationship with an important client. Introducing another capability into that account should strengthen the relationship, not create additional risk because the agency moved faster than its internal capability.

It is also worth recognizing that a strong opportunity on one side of the agency is not automatically a strong opportunity on the other. A hospitality company, for example, may be a meaningful P&C account because of its property, liability, workers compensation and operational exposures, while a workforce made up largely of part-time or hourly employees may create a much smaller or more complicated benefits opportunity. The reverse can also be true. The point is not to force parity between the two businesses, but to evaluate each opportunity on its own merits and bring both sides together where the client genuinely benefits from it.

Before aggressively cross-selling benefits, I would want confidence in the fundamentals. Do we have the technical knowledge? Do we have the service capacity? Can we manage implementation well? Do we have a process for staying engaged throughout the year? Can the team deliver consistently on what the producer promises?

If the answer is yes, then cross-selling can become a powerful growth strategy. If the answer is no, the agency may be trying to monetize existing relationships faster than it is building the infrastructure necessary to protect them.

Think beyond this year

I understand the pressure agency owners face to produce results now. New investments need to generate a return. Producers need to build books. Businesses need revenue.

But I think the most sustainable benefits practices are built by leaders who are able to hold two time horizons at once. They care about what the practice produces this year, while also asking who will be leading it five or ten years from now.

Who is the next producer? Who is the next client executive? Who is learning from the veterans today? What knowledge leaves when an experienced person retires? What is the plan for replacing that knowledge before the need becomes urgent?

The longer I work inside an established practice, the more I recognize that the expertise and infrastructure I see today were not created overnight. The experienced professionals I learn from were once inexperienced themselves. Someone invested in them, trusted them with increasingly difficult opportunities and gave them the repetitions necessary to improve.

That cycle of development is not separate from the practice. It is the practice. An independent agency can decide today that it wants to begin selling employee benefits. It can hire a producer, approach the market and create opportunities relatively quickly.

Building a benefits practice that can consistently advise clients, develop talent and continue growing for years is something different. That requires an investment in experienced people and emerging talent. It requires a service operation capable of delivering on the promise made during the sales process. Most importantly, it requires a willingness to think beyond the immediate return and build for the business the agency wants to have years from now.

You can start selling benefits tomorrow. Building a practice takes longer.

The author

Jack Leman is an Employee Benefits Consultant with Gibson, part of Unison Risk Advisors. A second-generation benefits professional, he grew up around the industry and now brings the perspective of a young producer learning inside an established benefits practice. He works with employers on benefits strategy, cost management and employee experience. Jack is a graduate of Butler University.